Stupid is as Stupid Does
Everyone with any brains at all must be able to see that the costs always end up on the least expert, least informed, least protected group in the country — the public.
“Keep your eye on one thing and one thing only: how much the Government is spending, because that is the true tax."
-- Milton Friedman
Monday, August 19th, 2024
Bill Bonner, writing today from Poitou, France
The last few days have brought the usual election-year claptrap. On Thursday, the press began warming up the audience for Kamala Harris, who was supposed to release her first important proposals.
CBS:
Harris is expected to announce that she will make tackling inflation a "Day One" priority, as well as outline a plan to lower costs for middle class families, take on corporate-price gouging and an overall focus on lowering costs for Americans, according to details shared by Harris-Walz campaign officials.
Bloomberg:
Harris to Propose $25,000 Assistance for First-Time Homeowners
Vice President Kamala Harris will propose offering as much as $25,000 for first-time homeowners as part of an economic policy rollout Friday, a tacit acknowledgment that voter angst over rising housing costs poses one of the biggest political challenges to her presidential campaign.
When the proposals finally appeared, they were a tired-out mixture of price controls, an ’innovation fund’ and debt forgiveness.
The cost of these giveaways, says Ms. Harris, will be paid by taxes on the rich and powerful. These, of course, are the same elites who control the Democratic Party, Congress, and the tax system.
So, more than likely, the expense will not be met by higher taxes, but instead be added to the national debt... and eventually paid by the people whose costs Ms. Harris claims to be bringing down. Already on the books are $35 trillion in bribes, boondoggles and balderdash; why not add a few billion more?
Meanwhile, Donald Trump continues to offer his own nonsense. The Donald:
“A tariff is a tax on a foreign country, that’s the way it is, whether you like it or not. A lot of people like to say, ‘Oh, it’s a tax on us.’ No, no, no…It’s a tax on a country that’s ripping us off and stealing our jobs. And it’s a tax that doesn’t affect our country.”
The Trump Administration hit China with tariffs back in 2018. Then, the Biden Team kept them in place. How did they work out? USA Today:
The Tax Foundation analysis found the tariffs together add up to $79 billion, which theoretically leads to an additional $625 in taxes for the average U.S. household. The Tax Foundation also argues the tariffs have had an overall negative impact on the US economy, by raising prices, and reducing output and employment.
But Mr. Trump is now proposing more of them. He even claimed that he would do away with the income tax — replacing it with taxes on imports. The Peterson Institute looked carefully:
The costs from Trump’s proposed new tariffs will be nearly five times those caused by the Trump tariff shocks through late 2019, generating additional costs to consumers from this channel alone of about $500bn per year... The average hit to a middle-income household would be $1,700 a year. The poorest 50 per cent of households, who tend to spend a bigger proportion of their earnings, will see their disposable income dented by an average of 3.5 per cent.
All of this just makes us wonder: is it the candidates who are stupid... the voters... or both? When the government spends money, somebody has got to pay for it. Everybody wants to believe that someone else will pick up the tab — the rich, corporations, foreigners.
But everyone with any brains at all must be able to see that the costs always end up on the least expert, least informed, least protected group in the country — the public, especially the part of the public that hasn’t been born yet.
Neither candidate suggests doing the one and only thing that will actually reduce costs for middle class families — cutting back on the government itself. Instead, both propose new programs to expand its reach.
It’s a scam. And they’re both in on it.
Regards,
Bill Bonner
Bill:
While I disagree on many things you write, I agree with you about the general public’s ignorance on who ends up paying for government spending. One thing you forget to mention (If I read correctly from the Heritage Foundation), Trump plans to get rid of the department of education (have the States handle it), rid the department of energy and some other worthless departments. I hope this does happen because the only way to save the country from bankruptcy is to cut spending. AP
Bonner's main point that government spending must be reduced is valid and the only way out of this mess. But his conclusion, "It's a scam. And they’re both in on it" glosses over some important details. You can take it to the bank that Harris (and her predecessor, Biden) have NO (zero, nada) valid free-market ideas in terms of getting our economy to grow and/or reducing the government. While Trump is far from perfect in this area, he is a pro-energy, pro-production (including deregulation) candidate who hopefully has learned from some of his mistakes in his first term (e.g., stimulus payments as one example). It is egregious that Bonner ignores this.
While, in general, I am no fan of tariffs, Trump has stated he uses tariffs in order to get other countries to eliminate their tariffs against American goods. On the other hand, as far as tariffs against China, a country that steals intellectual property, supplies the pipeline for fentanyl that kills Americans, and is building up its military (to identify a few bad actions), I have no problems even if it is a tax on Americans to some extent. While I am a free-market advocate, free-markets reside in a certain context - a world populated with nations that respect individual rights. China is not that by a long shot. We should not be enriching a country that doesn't respect the rights of its own citizens because it surely won't respect ours.