The more I hear about TARIFFS, the more it irks me. Because people are plain being lied to. Tariffs are taxes.
I came from a country (Australia) back in the 1980s, that had extensive customs & duties on everything that landed on its shores. Even through the 1990s the wharf worker unions controlled the entire inflow and outflow of goods into Australia and they had ridiculous high salaries and minimum working requirements to get it. That's because they could control the entire supply chain into and out of an island. That is pure power.
But even though the government had extremely high taxes on individuals, they would continue to think up cunning plans to add more and more taxes. They would call these things GST, customs fees, stamp duty (although they stopped stamping anything back in the early 1900s), etc. to the point of ridiculousness. People were lied to, extorted and bankrupted - all in the name of making the government coffers full. Meanwhile the government officials were incompetent at best in managing money and to this day infrastructure has suffered at their hands. Sure, there has been some relaxation in taxation of the people as an incentive to elect Party A over Party B, but the reality is that taxes are just more and more hidden into the prices of goods and services - to the point where filling up your tank with gas costs in excess of $150 or buying a packet of cigarettes is $50. This is just government extortion of the populace.
So when I see the news in the USA about "Fair Trade" and "Tariffs", I've seen it all before. It is another way to hide taxes on the American people by increasing the costs of goods that they consume.
Look, let's be fair.... The USA has a massive debt crisis. It loses money each year, and $21 trillion is just the current scorecard of how poorly it has been losing money over the years. And with another $150 trillion in unfunded future liabilities by way of social security & Medicare, there are going to be some seriously pissed off retirees in the next 10-20 years. No economic "magic" can make this problem go away.
Politicians need to be honest with the citizenry and tell them the truth - we are broke. We got that way because we spend more than we earn. And we all will have to fix the problem by paying more for goods.
But god forbid they use the evil 3 letter word - TAX. Nope, it will never be uttered out of a politician's mouth because they think of it as political suicide. How about for once that they stop treating us like kindergarten children and realize that we can see through this game.
If you think that your political party of choice is reducing your tax bill, think again. Total up the cost of buying groceries, filling up your tank with gas at the pump, paying for your cell phones, going to Walmart, buying a new TV at Best Buy, replacing your gutters on your house, etc. Realize that everything here will go UP in price. 25% seems to be the going number they are spinning on this, and since we don't make much in the USA and we import everything in, that means EVERYTHING will go up in price 25%. And this price point will be snowballed in that the integration of assembly of pieces of things where a piece comes from one country and is joined with a piece from another, results in constant increasing of price. With the middle men who live on this supply chain wanting a piece of the action, it wouldn't surprise me if we see 50% increase in price.
They can call it what they want, but this is a forced tax on all US consumers and who gets that money? The government get it. They collect it at the docks on imports, and it goes into the general fund to help pay down this debt we've done to ourselves. But of course they could mismanage that money and spend it on military hardware we never can use, and make big defense contractors richer. $1 trillion a year seems to go to them, rather than using it over 20 year period to pay down the current debt levels.
So all this political BS is hurting you. You will pay way more for EVERYTHING and it is by design. The banks know this and they have to ratchet up interest rates to try and keep the inflation at bay. They feel that by making the cost of getting access to money you didn't earn or save higher, they might create a dis-incentive for people to borrow. This just slows down the engine of the economy more. If you can't find cheap financing for that McMansion you want to buy, you will either rent or buy something cheaper on the outskirts of town. The wonderful thing about economics is that you can spin stories anyway you want, but when it comes to simple "I don't have the money to buy that", only those that are willing to take enormous risks for themselves and their families are likely to do it anyway. Unfortunately we have a population of financially poorly educated people who will fall prey to all of this.
So the winners here will be the financial vultures who are flush with cash and can pickup the pieces of a bankrupted estate sale. Because no matter what you read in the newspapers, hear from the politician's mouth or see on TV, the economy is FAR FROM GOOD when you are carrying this level of debt and more lies and spin are required to extort the population from their financial savings.
If you want to do really well in the upcoming economy, start to buy storage lockers. The surplus crap that people have bought will be forgotten about and for pennies you will be able to make millions in arbitrage of these failed life decisions of others to your benefit.
Good luck to you all! You are going to need it.
Tariffs are taxes but I'm not necessarily against them. I do feel that the American worker amd products is being cheated by our xurrent systems. Can we fix it? I don't think so but the trade war may actually be beneficial in making a lot of countries reconsider what they're doing. China has been gaining on the USA and they have been doing it at the expense of their people. As consumers we tend to forget but maybe the trade war will expose some of the injustices faced in other countries.
Thank you for your comment. I appreciate that you took the time to read my blog and comment on it. I'm not sure of your context, but I'm a self-employed person who (this year alone) has paid about $100K in taxes to the IRS. These are legitimate estimated earnings on capital gains, payroll taxes, income taxes (from 2017), sales taxes and this doesn't include the built in duties that are included in every drop of gas I put into my car, etc. You could say that I'm paying my "fair share", but here's the thing - in order to avoid paying 2x this amount, I have had to max out 401K investments, IRAs, HSAs, etc. just to try and reduce down the obligation. I employ a couple of people, but I can't grow my business because of the overhead of servicing this tax obligation.
What do I get for these taxes? Well the majority go to social security & medicare that I will never use. Then there is defense spending, which no one ever asked me if I wanted to spend $1 trillion a year on, when the country has a $21 trillion dollar debt. I'd vote no to interventionist policies that mandate this level of insane spending, but what do I know, right?
I mean I'm just a battery that generates energy that fuels a government I don't necessarily agree with, nor see the point to having. But that's the anarcho-capitalist in me I guess. You can get the point of how jaded I feel. I'm a "job creator" that generates the jobs for the American worker that you speak about. But I don't see that in the next 5-10 years I will need workers because they are all being replaced with automation. Sure, we will still need customer service people, etc. but do you know how little those jobs pay? We are clearly moving away from a human work force to a robot army, and I guess that just means we'll pay more and more taxes.
Tariffs are a great way to tax people without having to "tax" them. I allows raw consumption to be taxed without a sales tax being levied. It allows a move towards an automated society to be taxed based on what goods & services that society require to consume. I think its a perfect setup for the government to line their pockets and pay more for tanks & destroyers that we don't need. And to service the looming debt burden of those that are not working because either they chose not to, or they were displaced by globalism or by automation.
Yes, there will be more of this going on. And for that reason I don't see that tariffs will go away, regardless of the "great deals" the administration promise can be made. We will need to ween ourselves off the addiction to cheap Chinese products, and ween ourselves towards the addition of cheap "robot made" US products. Oh, meanwhile all the banksters have to be kept happy, so we'll keep up the addiction to credit card, student loan and mortgage debt to the point where we all have to borrow from 3rd parties to fund the addiction.
Fun times ahead I guess.
I think we would agree on a lot of things if we had the time to talk more. I agree with you on our credit card, student loan, and mortgage debt addiction. We xould also be more isolationist in some regards, we need to bite the bullet on social security and finally replace it with something that works. There's plenty we can agree on but I also understand that some fundamental differences can keep us from agreeing on what action to take. I have one friend who I always talk politics to and we can never agree in the end. We want the same things but we can never agree on how to get there.
Like you said maybe it sounds jaded, but with how different every individual thinks its not possible to have a perfect system. I just hope we improve little by little.
It is refreshing to have a conversation with someone on the Internet that doesn't devolve into a mud slinging process. I would love to talk about these issues. If we all did that, we'd find a solution - I'm sure of it.
Thank you @k0d3g3ar - this is a really good post. I enjoyed it and it helps me see things clearly.