Steve Pearlstein (Washington Post), Trump’s tariffs were rash. But the reckoning was inevitable: And delaying that reckoning will only make things worse.
Prof. Pearlstein teaches public and international affairs at George Mason. According to him, that with which we must reckon is that “As a country, we live beyond our means, consuming more than we produce and investing more than we save.”
I urge you to read the article. Much of it, you probably won’t like. But that’s the very reason why you need to read it.
But there is some sweet along with the bitter; you’ll like the multiple reasons why Trump’s tariffs are stupid. After expatiating on the multiple stupidities, Pearlstein ends this way:
That doesn’t mean we couldn’t benefit from raising tariffs on some imports until major trading partners lower tariff and nontariff barriers to American goods or stop subsidizing their exports. The dogmatic free traders were always wrong about that.
But tariffs are unlikely to alter the fundamental reality that, as a country, we collectively buy and invest more than we produce and save, which in broad terms is what the trade deficit represents. A simpler and more effective way to reduce that roughly $1 trillion annual trade deficit is to reduce our government’s $2 trillion annual budget deficit. Unfortunately, Trump is determined to do the opposite. For just as his new tariffs were unveiled, the president and his Republican allies in Congress were pushing through a budget plan to extend and expand tax cuts, increasing future budget deficits by hundreds of billions of dollars each year.
Put another way, by refusing to tax ourselves to pay for all the government services we demand — and borrowing the difference from the rest of the world — we are effectively giving households and businesses the money to buy more of the imports that the president is so determined to reduce.
For the past 50 years, America’s economic fantasy has been that another round of tax cuts or public investments will magically allow us to produce our way out of outsize budget and trade deficits. Instead, the twin deficits rose in tandem. In the real world, the only way to bring things back into balance is to begin living within our means and accept the painful adjustments that it entails. As we learned this week, there are better and worse ways to go about that rebalancing. But delaying that reckoning will only make things worse.
Facing MAGA 