Can you expand on this point and where you're going with it? Because the article mostly (poorly in my opinion) addresses the tariffs that were introduced which are a very different beast from the various tax cuts that have been implemented.
> The tax cuts briefly juiced growth, but not to the predicted 4% growth. Now growth is back down to 2%. Tariffs might be a contributor.
Isn't growth supposed to fluctuate ? I'm not well versed in economic theory (and this might not be totally relevant to the article) but from what I hear/read around me, growth (whatever that means) can't be sustained in linear fashion.
What are the counterarguments to that ? (not trying to start a crusade, I'm genuinely asking)
Yeah, but the tariffs only provoked any growth because companies rushed to stock up on supplies before the tariffs went into effect, anticipating that the coming price increase would decrease profitability and potentially destroy specific supply chains.
Tariffs can't produce any net growth, they can just juice short term growth at the expense of long term growth, and they can produce localized growth (ie for US steelmakers) at the expense of the broad domestic sector (ie all US manufacturers that use steel).
In general, tariffs are an own-goal. Trump had to implement new subsidies for US agricultural firms on the order of tens of billions of dollars annually (and has cost more than twice what Obama's big three automaker bailout cost) to prevent the collapse of US ag that lost a ton of export business because of the tariffs. If we could get China to stop stealing US intellectual property, perhaps the tariffs would be worthwhile, but there is a zero percent chance that will happen.
Some agricultural subsidies were automatic and in place prior to recent tariffs. Tariffs are bad economic policy if you’re trying to maximize global output, few rational actors try to do that.
Sure, tariffs are rough in the immediate if your business model is selling cheap Chinese steel to a dwindling middle class. You might even miss your quarterly numbers and donate to Mitt Romney. However, wage growth for the bottom 25% is at a decade high. https://www.frbatlanta.org/chcs/wage-growth-tracker.aspx Trump won’t be in office forever. Soon enough, you can sell us all out all over again.
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[ 2.8 ms ] story [ 21.9 ms ] threadThe tax cuts briefly juiced growth, but not to the predicted 4% growth. Now growth is back down to 2%. Tariffs might be a contributor.
Isn't growth supposed to fluctuate ? I'm not well versed in economic theory (and this might not be totally relevant to the article) but from what I hear/read around me, growth (whatever that means) can't be sustained in linear fashion.
What are the counterarguments to that ? (not trying to start a crusade, I'm genuinely asking)
Tariffs can't produce any net growth, they can just juice short term growth at the expense of long term growth, and they can produce localized growth (ie for US steelmakers) at the expense of the broad domestic sector (ie all US manufacturers that use steel).
In general, tariffs are an own-goal. Trump had to implement new subsidies for US agricultural firms on the order of tens of billions of dollars annually (and has cost more than twice what Obama's big three automaker bailout cost) to prevent the collapse of US ag that lost a ton of export business because of the tariffs. If we could get China to stop stealing US intellectual property, perhaps the tariffs would be worthwhile, but there is a zero percent chance that will happen.
Tariffs are just bad economic policy.
The most frustrating thing is watching this pattern repeat itself thousands of times.