Administration says more inflation ahead

Investment Analysis Clubs Macro Economic Trends and Risks
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This is ironical because Biden lost the election largely due to people’s frustration with inflation.

https://www.nytimes.com/2025/03/31/business/trump-tariffs-higher-prices.html

Tariff Gambit Bets Americans Will Swallow Higher Prices

Treasury Secretary Scott Bessent argues that the American dream is about more than cheap televisions, but inflation-weary consumers might disagree.
By Alan Rappeport, The New York Times, March 31, 2025

President Trump’s sweeping tariffs are expected to raise the cost of cars, electronics, metals, lumber, pharmaceuticals and other products that American consumers and businesses buy from overseas.

But Mr. Trump and his advisers are betting that they can sell an inflation-weary public on a provocative idea: Cheap stuff is not the American dream.

“I couldn’t care less if they raise prices, because people are going to start buying American-made cars,” Mr. Trump said on NBC’s Meet the Press show on Sunday in response to fears of foreign car prices spiking.

The notion that there is more to life than low-cost imports is an acknowledgment that tariffs could impose additional costs on Americans… [end quote]

https://www.wsj.com/opinion/donald-trump-tariffs-peter-navarro-6-trillion-tax-increase-2e5cc39d?mod=hp_opin_pos_1

A $6 Trillion Trump Tax Increase?

Navarro says tariffs will raise $600 billion a year for the government, but he says this is a tax cut.

By The Editorial Board, The Wall Street Journal, March 31, 2025

…
Mr. Trump’s chief trade adviser, Peter Navarro, is boasting about what he says will amount to a $6 trillion tax increase from the tariffs.

“Tariffs are going to raise about $600 billion a year, about $6 trillion over a 10-year period,” Mr. Navarro told Fox News on Sunday. This is on top of $100 billion a year from Mr. Trump’s car and truck tariffs. … [end quote]

If the President, the trade advisor and the Treasury Secretary say that administration policies will lead to additional costs – higher inflation – it’s a slam dunk. This is also a tax by a different name. Just as the economy is slowing.

Wendy

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It is easy for an out-of-touch multi-billionaire to think that Americans will be OK buying more expensive goods that are made in America.

I’m not sure the middle class can afford be so sanguine.

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I wonder if they will take my Trump coins?

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In the old days, we called this kind of bait and switch “being sold a bill of goods.”

There were a lot of buyers on November 4, 2024.

Pete

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That is how it’s being sold: generate enough revenue from tariffs, to repeal the income tax. What the base hears is “.bzzzzzzzzREPEAL INCOME TAXbzzzzzzz” Nearly every day, when I pull up my home page on Yahoo, there is something either touting the income tax being repealed, or the “DOGE checks”. The average Prole doesn’t realize that, as he spends almost all his take home pay buying stuff, the tariffs will hit him hard, while the “JC” that only spends a small fraction of his compensation on stuff, will be way ahead trading tariffs for no income tax.

We saw the same thing 40 years ago. Tax cuts sold as “across the board”, with a horizontal movement of the hand, indicating everyone gets the same cut. But, of course, it didn’t work out that way. When the new withholding schedules went into effect, I remember the news reporters going around to working people on payday, asking how much of a difference that “tax cut” made. Most of the replies, said with a sneer, were on the order of $2/week.

This time around, the impact will be much harder for the Proles to figure out. They won’t, so easily, see the difference in how much more they are paying for stuff, vs not paying income tax.

We will probably see another echo of the impact of the 80s policies: cuts in Federal money going to states and cities, results in tax increases by those states and cities, to maintain services. We have seen the same thing here in Michigan: state funding cuts to cities and counties have resulted in a mix of reduced services and local tax increases. The years of Lansing underfunding road maintenance, for instance, has resulted in my now paying a local property tax for road maintenance, even though the Township is technically not responsible for any roads.

Steve

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“If the President, the trade advisor and the Treasury Secretary say that administration policies will lead to additional costs – higher inflation – it’s a slam dunk. This is also a tax by a different name. Just as the economy is slowing.”

But he said he was going to bring prices down "On Day 1 ",lol

It is beyond me as to how anyone can trust him. Sure do not
get what the working-class red-hats are seeing, but whatever it is, it’s a mirage. But as Steve says downthread, the wealthy are gonna make a fantabulous score if he’s able to sell the delusions that these tariffs can replace the income tax. And sure, if/when they achieve the “drowning government in a bathtub” dream that they’re all salivating over, then they can eliminate the income tax. But not sure if I want to live in that version of American society, it will get very ugly.

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Here’s a thought. If TIG can run for a third term in 28, so can Clinton. They are the same age.

Clinton-Brief
Clinton-Brief1011×754 95.2 KB

Steve

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Also use your Elvis plates as currency. Same value–or higher. After all, Elvis is FAR BETTER (in all ways).

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