I’m going to be scathing in my critique because these people are both dishonest and incompetent and deserve to be called out on it.
Here’s their formula:
It’s a ridiculously simplistic formula.
First, a stylistic quibble. What is up with those asterisks in the denominator? I’ll give the authors the benefit of the doubt and assume that they wanted the formula to be understandable by people who aren’t familiar with standard math notation, in which the juxtaposition of variables indicates multiplication. But to see it written that way in an official document is just… weird.
The i subscripts in the formula just indicate that the formula is to be applied to one country at a time — country i. I’ll therefore omit the ‘i’s from the rest of the discussion.
∆𝜏 is the amount by which the tariff currently being placed on that particular country should change (according to the Trump administration bozos) in order to drive the bilateral trade deficit to zero. In other words, 𝜏 (the existing rate) + ∆𝜏 (the change in rate) would be the correct final rate (according to the formula) to achieve the dubious goal of a trade balance.
The inanity of insisting on bilateral trade balances
We’re off to a bad start already, because the notion that every bilateral trade deficit should be zero is ridiculous on its face. Let’s look at a simplified example. Suppose Malawi sells us only mangoes, and the US (henceforth ‘we’, since I’m American) sells them only air conditioners. In order for the trade deficit to be zero, we need to buy the same dollar amount in mangoes that they buy in air conditioners, and we should adjust the tariffs we impose on Malawi until that happens. Why is this desirable? Why should the amount of mangoes be linked to the amount of air conditioners? Who the hell knows? It’s just Trump’s idiotic obsession, and it makes no sense.
To make the stupidity even more obvious, think of an analogous situation. Ernesto sells tacos from a taco truck, and George runs a landscaping business. George occasionally buys tacos from Ernesto, and Ernesto hires George to mow his lawn. Suppose Ernesto pays more to George each month than George spends buying tacos from Ernesto. Is Ernesto being cheated? Is he subsidizing George? No and no. George gets every taco he pays for, and Ernesto gets his lawn mown on schedule. It would be ridiculous to say that either of them is being cheated, and ridiculous to say that the goal should be to make the amounts even.
Why is Trump obsessed with trade deficits? It’s because he is confused enough to believe that the existence of a bilateral trade deficit — a trading deficit with a particular country, Malawi in my example — means that they are cheating us and that we’re subsidizing them. He actually believes that we are just handing over the money, getting nothing in return. In reality, we get every frikkin’ mango we pay for, and they get every air conditioner they pay for. No one is being cheated, and to demand that the dollar amounts should match is idiotic and pointless.
Trump actually declares in his executive order that trade deficits are a “national emergency”. He does this because he doesn’t have the authority to impose tariffs unless it’s a national emergency. Otherwise, the job falls to Congress, where it belongs. Trump is lying about the supposed national emergency.
The formula
According to the USTR statement, the x in the formula is the dollar value of what we export to a particular country, while m is the dollar value of what we import from them. The numerator, x – m, is therefore equal to the trade imbalance. If x is bigger than m, then the difference is positive, and we are running a trade surplus. If x is less than m, then x – m is negative, and we have a trade deficit. But note that they have it backwards in the formula: it should be m – x, not x – m. Why? Because the denominator is positive. If both the numerator and denominator are positive, as they would be in the case of a trade surplus, the formula would deliver a ∆𝜏 that is positive. In other words, the formula as written would actually increase the tariffs for the countries with whom we have a trade surplus, and it would decrease the tariffs for countries with whom we have a trade deficit. The formula therefore punishes the (supposedly) good guys and rewards the (supposedly) bad ones, which is opposite to the administration’s intentions. One more indication of their clown car incompetence.
They could easily have corrected the formula if they were aware of the error. Just put a negative sign in front of the formula, or swap x and m, or redefine x and m as the amounts exported and imported by the other country, instead of the amounts exported and imported by the US. Any one of those three would fix the problem, but no.
Let’s assume that we have corrected that mistake for them and that the numerator now equals the amount of the trade deficit, not the surplus. What about the denominator? Well, it just so happens that the values they chose for 𝜀 and 𝜓 are 4 and 0.25, respectively. Those multiply to 1, thus canceling each other. How convenient. These charlatans actually and blatantly chose the values so that they would cancel out, instead of using the most accurate numbers they could find in the literature. They cheated.
After that suspiciously convenient choice of parameters, the formula is now just ∆𝜏 = trade deficit divided by total imports:
Do they actually apply this formula? No. They massage its output even more. They divide ∆𝜏 by two, for no good reason. That means that for the formula to match the actual tariffs, they should multiply the denominator by 2. They fail to do that, as you’d expect. Why 2? My hypothesis is that even those dunces realized that the numbers they were getting from the formula were ridiculously large, and dividing by 2 was a way to get them down to a range that they considered reasonable. More number fudging with no theoretical justification.
Next problem: according to the corrected formula, ∆𝜏 should be negative in the case of trade surpluses. That is, we should decrease the tariffs on imports from those countries. If the existing tariff rate is small enough, it should even go negative, according to the formula, in order to balance our trade with that country. Trump doesn’t like that, so he has arbitrarily declared that everyone will pay a minimum of 10%, whether there’s a trade deficit or a trade surplus. In other words, the policy, which is already misguided, is also unfair — it says that it’s OK for the US to screw other countries by imposing high tariffs, even if they’re doing the “right” thing and allowing us to run a trade surplus with them.
The actual rates
Here are the charts spelling out the actual tariff rates.
The chart labels them “Reciprocal Tariffs”, but that is a lie, since the formula doesn’t take into account the tariff rate charged by the other countries on our exports to them. It’s completely missing from the formula. They aren’t reciprocal tariffs, they’re misguided tariffs in response to trade deficits, and they punish US importers instead of the countries selling us those goods and services.
The label on the middle column is wrong for the same reason, and it’s even further wrong because it depicts a bilateral trade deficit as a quantifier of “currency manipulation and trade barriers”, which it isn’t. We can run a bilateral trade deficit for no other reason than that Americans want more of what the other country is selling us than they want from us. That’s not “currency manipulation and trade barriers”, and the Trump administration is dishonest for trying to sell it that way.
The numbers in the middle column are apparently those that come straight out of the formula. You can tell, because the tariffs that are actually being imposed by the US are just the middle column divided by 2. That’s the arbitrary factor of 2 I mentioned above. The only exceptions are in those cases where dividing by 2 would leave a less than 10% tariff, in which case the tariff is set to 10%. Gotta make sure that everyone gets screwed at least that much.
The US Trade Representative’s explanation
Now some excerpts from the USTR statement. The very first paragraph:
Reciprocal tariffs are calculated as the tariff rate necessary to balance bilateral trade deficits between the U.S. and each of our trading partners. This calculation assumes that persistent trade deficits are due to a combination of tariff and non-tariff factors that prevent trade from balancing. Tariffs work through direct reductions of imports.
Well, duh. The phrase “tariff and non-tariff factors” covers literally every possible factor in the entire world. Yes, there are actual reasons that we buy more in mangoes from Malawi than they buy from us in air conditioners. Therefore we should conclude that we’re getting ripped off?
While individually computing the trade deficit effects of tens of thousands of tariff, regulatory, tax and other policies in each country is complex, if not impossible, their combined effects can be proxied by computing the tariff level consistent with driving bilateral trade deficits to zero.
Not by any reasonable person. You need to do the homework before making policy decisions that will affect the entire world economy. If they want less of what we’re selling than we want of what they’re selling, that can lead to a trade deficit, independent of all the factors they list above.
This doesn’t mean that trade practices can’t be unfair, but it does mean that to assume something nefarious is going on merely because we’re running a bilateral trade deficit is stupid.
If trade deficits are persistent because of tariff and non-tariff policies and fundamentals, then the tariff rate consistent with offsetting these policies and fundamentals is reciprocal and fair.
No. If we like Malawian mangoes more than the Malawians like our air conditioners, nothing is broken. Nothing is unfair. No reason to blindly punish the Malawians. It just means that American demand for Malawian mangoes is greater than Malawian demand for American air conditioners. No big deal.
A case could be made for nudging the US’s global trade deficit — which is the aggregate trade deficit we’re running with all of our trading partners put together — toward zero, but trying to eliminate every bilateral trade deficit is bonkers. These people are clueless.
Consider an environment in which the U.S. levies a tariff of rate τ_i on country i and ∆τ_i reflects the change in the tariff rate. Let ε<0 represent the elasticity of imports with respect to import prices…
Right there they say that ε < 0, but a few sentences later they assign it a value of 4. The last time I checked, 4 was greater than 0, not less. Their sloppiness is consistent, at least. What is wrong with these folks?
let φ>0 represent the passthrough from tariffs to import prices, let m_i>0 represent total imports from country i, and let x_i>0 represent total exports. Then the decrease in imports due to a change in tariffs equals ∆τ_i*ε*φ*m_i<0. Assuming that offsetting exchange rate and general equilibrium effects are small enough to be ignored, the reciprocal tariff that results in a bilateral trade balance of zero satisfies:
As noted earlier, they have the numerator backwards. It should be positive for a trade deficit, not negative, in order for ∆𝜏 to be positive, which represents an increase in tariff rates.
To calculate reciprocal tariffs, import and export data from the U.S. Census Bureau for 2024. Parameter values for ε and φ were selected. The price elasticity of import demand, ε, was set at 4.
Which inside the Trump administration is less than 0, lol. And how convenient that εφ multiplies to 1, as noted above.
Recent evidence suggests the elasticity is near 2 in the long run (Boehm et al., 2023), but estimates of the elasticity vary. To be conservative, studies that find higher elasticities near 3-4 (e.g., Broda and Weinstein 2006; Simonovska and Waugh 2014; Soderbery 2018) were drawn on. The elasticity of import prices with respect to tariffs, φ, is 0.25.
It wasn’t to be conservative. It was to fudge the numbers so that the product εφ came out to be 1. And picking a value of 4 for elasticity isn’t “being conservative” in the sense of “this value is more likely to be correct”. It’s conservative in the sense of “we’d better make this number big because otherwise the tariffs will be so outrageously huge that everyone will see that we’re idiots.”
Think about it. They want φ to be small (whether or not the evidence supports it), because they want to maintain the fiction that other countries will mostly absorb the tariffs and that importers and retail customers will shoulder less of the burden and therefore experience less inflation. On the other hand, a small φ balloons the value of ∆𝜏 to ridiculous levels. So they set 𝜀 to 4 to bring ∆𝜏 down, even while acknowledging that the true value of 𝜀 is closer to 2.
The recent experience with U.S. tariffs on China has demonstrated that tariff passthrough to retail prices was low (Cavallo et al, 2021).
I haven’t verified that, but either way I would sure like to see the actual number. Why didn’t they include it? Is it really 0.25? In any case, the question of pass-through to retail prices is irrelevant when you’re trying to determine which country is absorbing the cost of the tariffs. It’s the pass-through factor to importers that is relevant, and that is close to 1, even if the pass-though to retail customers is less. That means that US importers are bearing the cost of the tariffs and passing some of that cost on to consumers. It’s inflationary, and it’s a tax by the US government on US importers, not a tax on foreign countries. Which contradicts Trump’s whole rationale.
The reciprocal tariffs were left-censored at zero.
No, they were “left-censored” at 10, as you can see by looking at the charts. 10 is the minimum tariff you’ll see in the third column of the charts.
Higher minimum rates might be necessary to limit heterogeneity in rates and reduce transshipment.</p
No explanation of why “heterogeneity in rates” is to be avoided, and no comment on the fact that it isn’t avoided, given the large range of new tariff rates in the third column of the charts. That means there’s still plenty of incentive for transshipment. Take Vietnam, for instance, with a new rate of 46%. There’s a *lot* of incentive for them to transship through one of the countries with a 10% rate.
Tariff rates range from 0 to 99 percent.
There is no inherent limit. Tariffs could be 100%, 180%, or 2100%. 99% is an arbitrary limit. Tariffs could even be negative in a perverse world, in which case the government would be giving importers a bonus for importing more and nudging us toward a trade deficit. Obviously that wouldn’t happen in practice, but my point is that the 99% is arbitrary, and anyone who thinks tariffs are limited to being less than 100% doesn’t understand tariffs.
The unweighted average across deficit countries is 50 percent, and the unweighted average across the entire globe is 20 percent.
It’s pointless to state the unweighted average. An unweighted average is really just a weighted average with all of the weights set to 1. That gives Liechtenstein equal weight with China, which is stupid. Our trade volume with China is some 1,770 times as great as our trade volume with Liechtenstein, but these geniuses are weighting them evenly and presenting the average as if it had some kind of significance. Morons.
Weighted by imports, the average across deficit countries is 45 percent, and the average across the entire globe is 41 percent. Standard deviations range from 20.5 to 31.8 percentage points.
Here, they tell us that the import-weighted average of tariffs is 41 percent. Combine that with their assumed pass-through rate of 0.25. meaning that exporters in other countries will shoulder 75% of the tariff burden. That’s unrealistic and it clashes with the actual data, but even if you take the Trumpers at their word and assume that only 25% of the additional cost due to tariffs is passed to importers, that’s still over 10%, because 0.25 * 41% is greater than 10%. 10% import inflation! So much for Trump’s campaign promise: “I’ll reduce prices on day one.” Idiot.
Good job, Trump supporters. By voting for him, you put power in the hands of these dishonest and incompetent economic doofuses.
I sure hope this lack of urgency does not extend to other situations in your life, like your house catching on fire.
When the purpose is to fix the house, do not judge a house fire based on the first 3 months of its burning.
Seriously, colewd, Trump’s idea of trade deficit is that other countries are ripping USA off and the purpose of tariffs is to bring back the trillions that Biden lost. This demonstrates indefensible levels of economic illiteracy. You are defending the indefensible, which is yet another definition of insanity.
Edit: An article about (the historical) Hitler’s tariffs just out, Hitler’s Terrible Tariffs
Even though Hitler’s own idea of tariffs may have had its flaws (but it appears far sounder than Trump’s utter cluelessness), Hitler’s minions knew well what tariffs are:
– Introduction of tariffs is sure to raise prices
– Tariffs *block* trade, their purpose is to deny or at least reduce the access of foreign products to the market, therefore
– Tariffs are not a generator of revenue for the government
Trump (and colewd) do not show the slightest understanding of any of this.
Corneel,
I have been waiting 25 years for people to realise that our country has been over spending based on its revenue and that this policy can end very badly.
What’s imprudent is for you to back a plan as stupid as Trump’s. Corneel’s house fire metaphor is apt.
I’m not basing my criticism on the market routs. The tariffs are objectively stupid, and the market movements are just confirmation of that. Even if we were in an information bubble and had no idea how the markets were responding, we could still conclude that the plan is stupid based on everything discussed in this thread. Even the goal — balancing trade with every partner – is stupid.
A stupid plan, poorly executed by an economically clueless guy, aimed at a goal that if reached would hurt Americans badly. Again I ask, why would you choose this when other, smarter ideas are available, put forward by people who actually understand the economy?
keiths,
Hi Keiths
This is your opinion and you are entitled to it. I disagree with you but I will congratulate you down the road if you turn out to be right. There are a lot of things that need fixing in the world and tariffs maybe leverage to get the boat moving in the right direction. We will see. Thanks for the interesting op.
colewd:
If that is your worry, why support a plan that is going to make it harder for the US to service its debt?
I’m curious — do you disagree with any of the following?
1. Bilateral trade deficits are not subsidies.
2. They do not indicate that we are being cheated.
3. Achieving trade balance with every partner is a stupid goal.
4. Tariffs are a tax on us, not on foreign countries.
5. The idea that tariffs are a tax that “doesn’t affect our country” is obviously false.
Why don’t you explain your thinking here?
As far as your 5 points I don’t think they are necessary wrong. Are you trying to make the case that implementing a tariff is wrong in all cases?.
Well, tariffs might be right on some other planet or universe. Were we not talking about Trump’s tariffs when Trump (and you) don’t even know what tariffs are?
Edit: According to this WSJ article, Trump Advisers Took Advantage of Navarro’s Absence to Push for Tariff Pause, Trump’s policy of a 90-day pause in tariffs was born as follows:
– Bessent and Lutnick (in anti-tariff camp) created a bogus meeting for Peter Navarro (pro-tariff) across the street from White House to bait him away from Trump for a time
– Then Bessent and Lutnick went to the Oval Office to convince Trump to put tariffs on pause and they did not leave until Trump had put out a relevant message on social media
– Bessent went immediately to confirm in front of cameras that the pause on tariffs was an official policy before Navarro made it back and could no longer reverse the situation
So, this is Trump’s tariff policy: There is no policy, at least not Trump’s. Trump just says (and does) what his most recent advisor talks him into.
Now, the idea of exorbitant tariffs by itself is bad enough, but the implementation here without any larger plan makes it worse. And it is exponentially worse with the uncertainty of tariffs on, tariffs off, tariffs ramped up over 100%, and then postponed.
keiths:
colewd:
Trump’s plan makes US assets, including bonds, less attractive. Their price falls, which is equivalent to the US paying a higher interest rate on its debt.
Here’s why. Let’s say you buy a $1000 Treasury bill that matures in one year. That means the government has promised to pay you $1000 one year from now. You pay the government $962 (the current price). In effect, you have loaned $962 to the government, and your deposit earns 3.95% interest, which works out to $1000 one year from now. From the government’s perspective, they have borrowed $962 from you and are paying a 3.95% interest rate. (The effective interest rate is known as the “yield”.)
Suppose the price were $8 higher, so that you would pay $970 to the government instead of $962. The effective interest rate in that case would be only 3.09%. The government is paying a lower interest rate. When bond prices go up, the interest rate falls, and it’s cheaper for the government to borrow money. When bond prices go down, the interest rate increases and it costs more for the government to borrow.
Trump’s actions have caused bond prices to fall, which raises the effective interest rate that the government is paying, which makes it more expensive for the government to service the debt.
colewd:
Those are fundamental, and Trump gets all five of them wrong. He’s unfit to determine economic policy.
No. Tariffs are a tool. They have their uses, but they can also be abused, and Trump’s reckless actions are clearly an abuse.
Erik:
That’s wild but totally believable. The adults in the room (relatively speaking) have to keep certain wackos away from Trump. They did it with Sidney Powell after Trump lost the 2020 election. They failed to do it recently with the batshit crazy Laura Loomer, and as a result Trump ended up firing a bunch of national security officials. Then there’s Peter Navarro, who cited an expert named Ron Vara in several of his books. Turns out Ron Vara doesn’t exist — his name is just an anagram of ‘Navarro’.
These are the people Trump surrounds himself with.
Even if (for the sake of argument) one accepted the idea that each nation “should” separately have balanced trade with the US, the Trump Formula does not achieve it. Arbitrarily, it sets the fudge factors to yield a product of 1. Then it halves the result. Then it sets a floor of 10% so even nations with whom US is in surplus are punished. (And, as I and others have already belaboured, it ignores differentials in the value of the dollar between countries, differentials in the commodities traded in and out, supply and demand, the economy in services, unpredictable retaliation and market response). It’s 4d chess only if you get to move both sets of pieces.
It is objectively dumb, as formulated. I see no reason beyond blind faith in its architect for waiting years before adjudicating.
Allan:
Anyone want to guess whether colewd would be saying “let’s wait and see” if the person jacking up tariffs had been Biden?
keiths,
You are right that given are large national debt high interest rates makes government borrowing more expensive and makes it much harder to balance the budget. The current debt service is one trillion dollars and represents half the budget deficit.
Interest rates are highly correlated to the inflation rate.
Tariffs will increase prices to some degree especially in the short term but this should be counteracted by increase in domestic supply due to de regulation. During his first term we experienced very low inflation and lower interest rates as a result.
Trumps strategy is to increase domestic production by making it easier for domestic producers to compete. He is also aggressively cutting regulations that reduce output.
While there will be short term price pressure from the tariffs it should be balanced by the increase in domestic production.
Your points do not correlate with sound trade policy.
I don’t think you can make this case until the negotiations are completed.
This is the level of strategy and policy you can expect from Trump, both short term and long term.
This is from encyclopedia.com:
It can easily be argued that America’s most important export has been the Constitution of the United States. It was the first single-document constitution. It is the longest-lived. And in only two centuries, virtually every nation has come to accept the inevitability and value of having a constitution. This fact transcends differences of culture, history, and legal heritage. The United States Constitution is perceived as the fundamental point of reference, even by regimes whose philosophical outlook is antidemocratic. Furthermore, nearly every nation has accepted the “Philadelphia formula”—either internally or universally—as the means by which an effective constitution can best be produced.
There is more here:
https://www.encyclopedia.com/politics/encyclopedias-almanacs-transcripts-and-maps/influence-american-constitution-abroad
OK, I guess we aren’t communicating after all. You are rearranging deck chairs here. If we call the Senate majority leader “head of state” and Trump “head of government”, that doesn’t change anything. My point is that the leadership, supported by enough of the public, can violate or simply ignore the laws, the structure, or whatever. Putin didn’t change his constitution to make himself dictator, he changed it because he WAS dictator, and could do it as he chose.
I have to wonder…if Trump is willing to violate ANY structure, and has active support from the leadership of the legislature, the judiciary, the media, the biggest law firms, then he does as he pleases. Structure only matters when people of good faith recognize its value and act accordingly.
Yep. And his immunity was granted because the Justices were largely appointed by trump. Now, if you are saying that a “proper structure” will work unless enough of those in power are corrupt, I agree with you. Trump could never have moved the US toward fascism alone. To reach autocratic takeover, he needed the willing cooperation (or willing inaction) of enough voters and enough members of congress. Once that tipping point is reached, it’s too late – all the levers of power are in the hands of toadies gleefully following Trump’s direction.
Yes, quite so. This move required the Heritage Society, Fox News, Citizens United and a lot of money.
This is politics. Person before party, party before country. It’s really a shame I can’t upload a picture showing poll results about the economy. When the evil party is in power, confidence in the future of the economy and perception of economic problems is sky high. But this reverses on the very day the other party wins. This is the point I think you are making. It’s not a matter of whether high tariffs are good or bad – few people understand them anyway. So it’s only a matter of who is in office. If YOUR guy is President, even murder can be normalized.
Okay. You do not know what the terms mean. I regard it as not my job to educate you.
Encyclopedia.com: [U.S. Constitution] was the first single-document constitution. <– False
Encyclopedia.com: [U.S. Constitution] is the longest-lived. <– False
Encyclopedia.com is clearly American brainless propaganda drivel. You did not even attempt research.
keiths:
colewd:
Four of the five aren’t even prescriptive. They’re factual, which means they correlate with the truth, not with any particular trade policy. Here are those four:
If you buy more from the grocery store than they buy from you, you are running a trade deficit with them. Does that mean you’re subsidizing them? Obviously not — you’re simply buying more from them than they buy from you. You get everything you pay for, and they pay for everything you give them.
It’s no different with countries. If we buy more in Malawian mangoes than they buy in US air conditioners (the simplified example from my OP), it’s not a subsidy. We get all the mangoes we pay for, and they pay us for all the air conditioners we ship to them.
The simple fact is that trade deficits aren’t subsidies. It’s obvious, yet Trump can’t comprehend that. Instead, he says ridiculous things like this:
Not only does he confuse trade deficits with subsidies, he also gets the numbers wildly wrong. The actual trade deficit in goods with Canada is just $63 billion, and that drops to $36 billion when you include services. Trump is completely out of his depth.
If the Malawians give us all the mangoes we pay for, and they pay us for all the air conditioners that we give them, then we are not being cheated. We’re choosing to buy mangoes at an agreed-upon price, and we’re choosing to sell air conditioners at an agreed-upon price.
Stop and think about how idiotic it would be for you to claim that your grocery store is cheating you merely because you buy more from them than they buy from you. Yet that’s Trump logic. You want this guy setting US economic policy?
Should your personal goal be to reduce your grocery purchases to match the amount your grocery store buys from you (which is presumably zero)? Do you benefit from achieving trade balance with your grocery store, by eliminating all grocery purchases?
I looked at a specific example in an earlier comment, concluding:
Trump actually believes he is taxing other countries:
Americans pay the tax. Foreign countries don’t. Tariffs are a tax on Americans, not on other countries.
Trump’s claim didn’t age very well, did it? The entire world, including the US, is being affected by his ridiculous tariffs.
Here’s the only one out of five items on my list that is prescriptive:
If you think that that “doesn’t correlate with sound trade policy”, tell us why. Why is it important for our imports of Malawian mangoes to match our exports of US air conditioners? If it’s OK for you to run a trade deficit with your grocery store, why is it not OK for the US to run a trade deficit with Malawi? Be specific.
The radical left hippie journalists at the Wall Street Journal — that liberal bastion — are scathing in their criticism of Trump’s threats to sack Jerome Powell. In an editorial titled The Fire Jerome Powell Market Rout , they write:
Just had a look using my bot registration and I can’t replicate the problem. What does happen is I get a partial view in a text box with scroll bar that I can only use if I click away from the box to lose the keyboard window, scroll to read what is in the window, then click in the text box to bring back the keyboard. Tedious, I agree.
Anyway, if Faded_Glory or other members are still finding issues, if they would post a brief description in the Moderation Issues thread, I will see what I can do.
I access the site on my PC, not on a phone (I suppose that is what you are referring to?)
Really? In what way has your country overspending affected your day to day life?
Ah, bear with me. Today has been a slow return to normality recovering from the effects of l’omelette géante de Pâques. Will check using my laptop. My desktop is currently mothballed awaiting a final decision on scrapping. How to save memorabilia these days, I dunno?
Sorry to keiths for derail. I feel an OP coming on.
Corneel,
It puts constant pressure on the tax burden of the citizens. Do you not understand the problems when debt burden becomes too large to service? Companies go bankrupt and so can governments.
Where would we be if we had kept the size of government to run a surplus like we had during Clintons presidency. The tax burden would be continually reduced and the country would be much more productive.
Erik,
I see Al Gore has been reading Erik’s comments.
No Bill, Governments that issue their own soverigh currency can never go bankrupt, because they can always create more money to cover their debts. Fact. Only Governments that have their currency pegged to another country’s run that risk.
Going bankrupt is not the problem. Losing confidence of the financial markets is the real problem. If the markets decide that the dollar is no longer stable enough to warrant investing in, they may take their funds elsewhere. If that ever happens, the dollar will tank and the USA will be in extreme trouble.
One way for this to happen is if the US Government displays all the hallmarks of having lost the plot, so that the business climate becomes unstable and unpredictable. This is how Trump now comes across to the rest of the world outside his fan base. Right now he is in fact a far bigger risk to the US economy than the National Debt.
faded_Glory,
You are technically correct in the short term but my worry is about where we are going without correction. Trump is unlikely to cause financial chaos in the next 4 years as we already have a 4 year sample of his leadership. Here is an AI interpretation of what happens in a debt default.
https://grok.com/share/bGVnYWN5_0d458a14-1539-4f3a-b659-944c23613dc0
77 million Americans voted for this change.
How can you say this with a straight face? Have you even checked the news recently? The financial chaos is already here, caused by Trumps erratic and irresponsible decisions, and it is getting worse by the day.
77 million Americans have been conned, and they are too trapped in their partisanship to admit or even understand it.
It’s more likely that Al Gore was inspired by JD Vance https://www.newsweek.com/jd-vance-worried-trump-was-americas-hitler-text-shared-roommate-1698739
From the BBC, today:
Still cheering him on?
You are Trump’s equal at admitting you’re wrong.
We don’t have to wonder, we just look at what happened. And what happened is that Congress became drunken sailors. This is entirely predictable.
faded_Glory,
Perhaps the American public has been foolish here. Time will tell. I think you are underestimating that there is already a 4 year period where tariffs were raised.
I think your panic is simply panic and not real…we will see. The news has little credibility with people in the US at this point. This is a reason Trump despite being hated by the media was still elected.
Flint,
The executive branch also was occasionally sipping the whiskey. 🙂
So you are happy to risk financial pandemonium and keep paying the tariffs because you are afraid you might be paying too much in taxes otherwise? Did you think that through?
This is interesting. Are you saying you believe the news about the chaos on the stock market to be fabricated?
colewd:
Here’s what they actually voted for:
Trump:
And:
And:
And:
And:
That’s what people voted for. Promises made, promises not kept.
You got suckered, Bill.
colewd,
Not a fan of this absurd kind of substitute for an argument – that anything an elected body does is justified by pointing to the number of people voting for the body. If Trump decides to execute his enemies, 77 million Americans voted for it…
We get the same with Brexit and “17.4 million” – even though many are now dead, and many of the things presumed assented to were not specified in the ballot or campaign.
That “day one” business reminded me of something.
Trump, at a town hall:
Kaitlan Collins:
Trump:
Trump, during the debate with Kamala Harris:
He made the 24-hour claim repeatedly during the campaign, but of course there was never any chance that he could deliver. He’s a blowhard who makes promises he can’t keep, because he knows that people like Bill will eat it up.
Here’s another good one:
Let’s put also this nuclear genius classic in here.
Corneel,
The volatility is high indeed but not at historically high levels.
Allan Miller,
Democracy is about convincing voters you have the best plan. The plan of the last 4 years was not very convincing to people that it was in their best interest. The administration is set in power for at least 2 years. This is the reality we are all facing.
International Monetary Fund yesterday https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/world-economic-outlook-april-2025
IMF is saying politely that Trump is a global threat. You can stop pretending now, colewd. Of course, you won’t stop. Your idol can do no wrong.
Particularly in a 2 party system, your vote integrates a huge number of issues. People vote against the black woman or the Democrat, or reflexively for whoever is the Republican, or who will best protect their farm or their gun collection or bring down egg prices or they like his tie or…
It is not reasonable to assert that those voters finding themselves in the majority assent to everything the chosen candidate does. Even the anodyne “has the best plan”. This particular blanket approach was not telegraphed in campaigning. Either way, you can’t infer any particular intent from a simple X on a ballot, nor the sum of such Xs. An electorate is not an individual with a summed ‘will’.
Democracy is not simply ‘vote and sit back’
Allan Miller,
Hi Allan
This is all true but economic issues usually dominate the priority list.
Clinton increased debt by 29%. Biden, 30%. Trump added a whopping 40% or 8 trillions to the US debt… in just ONE term. That’s more debt per term than every US president other than Roosevelt, Wilson and Reagan. What are you talking about?
Corneel:
colewd:
Come on, Bill. “There’s chaos, but there are times in the past when it’s been worse” is your defense? That’s pretty weak tea. Let’s look at the numbers. The VIX (the standard volatility index) averaged 15.5 during 2024. It’s now at 28 — almost double. And it peaked at 60 after Trump announced his tariffs. Yay, Trump?
Besides, volatility isn’t the only problem. What about price? Headline from the Wall Street Journal yesterday: “Dow Headed for Worst April Since 1932 as Investors Send ‘No Confidence’ Signal”. Yet today the market is surging. Why? Because Trump backed down yet again. CNN headline: “Trump says he has ‘no intention of firing’ Fed Chair Powell, days after saying his ‘termination cannot come fast enough’”. The markets trust Powell. They don’t trust Trump.
Also contributing to the surge? Trump is backing off from his exorbitant China tariffs.
The message is clear: the markets don’t like Trump’s plan, and they don’t like Trump.