Doesn't Add Up

Remember the general rule: the more the feds meddle with the economy, the worse it gets. Revenues fall...real asset prices drop and opportunities for ripping off the public increase.

Source: Getty Images

Friday, December 12^th, 2025

Bill Bonner, from Baltimore, Maryland

AOL news:

President Trump announced a $12 billion farm aid package on Monday, money the president said “would not be possible without tariffs.”

“We’re giving some up to the farmers because they were mistreated by other countries,” Trump said.

Mistreated? Did they rough them up at the border? Laugh at their hayseed accents and Carhartt duds? Ask them to disclose what chemicals they used? AOL elaborates:

Some farmers and economists were quick to note that the problems facing farmers and the mistreatment they have endured are primarily a direct consequence of Trump’s own tariff actions.

US farm exports rose about 3x since 1999. Farmers farmed. Buyers bought. They set the terms among themselves...and worked out whatever disagreements they may have had as best they could. Then, the feds stepped in.

Remember the general rule: the more the feds meddle with the economy, the worse it gets. Revenues fall...real asset prices drop and opportunities for ripping off the public increase. The latest example:

The Donald started a trade war. Other countries fought back. Farm exports fell. Farm revenues fell. So, instead of getting their money from customers, farmers are now slated to get $12 billion from taxpayers.

Who decides who gets what? How, when, where? That’s where the grift comes in. Like the fake money itself, the farm welfare comes not in exchange for providing honest goods and services, but from the Great White Father in Washington...who can share it out more or less as he pleases.

And where’s the money going to come from? Reuters:

US posts $173 billion budget deficit in November

In other words, the deficit for a single month was almost the same as last year’s entire food exports. And if the deficits continue at this pace, it will bring the annual shortfall to $2 trillion...and put the national debt over $40 trillion.

But not to worry. ABC News tells us that the money for paying off the farmers will come from tariff collections, Donald Trump:

“I’m delighted to announce this afternoon that the United States will be taking a small portion of the hundreds of billions of dollars we receive in tariffs...and we’re going to be giving and providing it to the farmers in economic assistance. And we love our farmers…”

Trouble is, those tariff revenues were already included in the fed’s budget. Take out $12 billion for the farmers and the debt just goes up. And debt service costs are paid by the same people who are now also paying higher prices for everything. The Independent:

President Donald Trump’s sweeping taxes on imports have cost the average American household nearly $1,200 since he returned to the White House this year….

American consumers’ share of the bill came to nearly $159 billion — or $1,198 per household — from February through November, according to a report by Democrats on Congress’ Joint Economic Committee...

Officially, food prices are up 26% since 2020. But no one who has bought a burger from McDonalds or set foot in WholeFoods believes it. Fast food prices, for example, are up 77% over the same period.

And people don’t like it. The Daily Beast:

Trump hit with his worst-ever approval rating on the economy

Even the Oval Office Team has felt it necessary to cover its tracks. BBC:

US President Donald Trump has signed an executive order allowing a range of food products, including coffee, bananas and beef, to escape his sweeping tariffs.

The move comes as his administration faces mounting pressure over rising prices. While Trump previously downplayed concerns about the cost of living, he has focused on the issue since his Republican Party’s poor performance in last week’s elections.

At home, the feds are trying to undo some of the damage they’ve done — by cutting back on their favorite program...and buying off farmers with direct subsidies.

On Monday, we’ll look at who’s winning the tariff war overseas.

The Chinese, meanwhile, got hit with a tariff of 145% — following Trump’s ‘Liberation Day’ performance. This was later dropped to 30%. But they got the message. They saw that they couldn’t trust the US...and diversified away. CNN:

China’s Answer To Tariffs Is A $1T Trade Surplus

Just a year ago, Chinese manufacturers, fearing a new trade war, rushed to push out exports following the election victory of US President Donald Trump, who had pledged to slap punishing tariffs on imports from China over America’s widening trade deficit. A year later, Trump has delivered on his promise. But China has pivoted — and exported more.

The trade war may not be over; but who’s winning so far?

More to come.

Regards,

Bill Bonner