Lutnick: “We’re going to make the External Revenue Service replace the Internal Revenue Service.” 
By “External Revenue Service” Commerce Secretary Howard Lutnick means tariffs.
Click on the above link for a video cheered on by Fox News, watched 317,000 times, and liked by 686 fools.
To balance the budget with tariffs, the administration would need to bring in $7 trillion. To replace individual and corporate income taxes, tariffs would need to bring in $3.1 trillion.
Tariffs brought in about $30 billion for the full year in 2024.
Annual Goods and Services Balance of Trade
Reciprocal Tariffs
We have an annual trade deficit of $918 billion.
Listen carefully.
Reciprocal Tariffs
We have an annual trade deficit of $918 billion.
Team Trump proposes $918 billion in “reciprocal tariffs” to make the trade deficit go away.
But to balance the budget and eliminate personal income taxes, Trump would need to collect $7 trillion in tariffs on a net trade deficit of $918 billion.
I would love to hear a detailed explanation of exactly how that works.
Since it doesn’t, let’s make some adjustments.
New Assumptions Needed
Tariffs will not be reciprocal. Instead they will be extremely unbalanced, nations won’t react, and there will be no tariff avoidance.
We would need to faithfully collect 200 percent all tariffs on total imports ($3.3 trillion) with no trade frictions, no retaliations, and full compliance.
Everyone will gladly pay (meaning consumers). Lutnick and Trump fail to understand tariffs are a tax on consumers.
Under our new assumptions, Team Trump only needs to bring in $7 trillion in tariffs on $3.3 trillion in total imports.
That’s much easier than bringing in $7 trillion in tariffs $918 billion reciprocal tariffs.
We need to faithfully collect 200 percent tariffs on everything with of no trade frictions, no retaliations, and full compliance.
Are you ready for that miracle? Me too. But wait, there are still more benefits to this amazing deal.
Trumps Claims
- Tariffs will increase revenue enough to balance the budget
- Tariffs will bring manufacturing back to the US
- Tariffs will reduce inflation
- Tariffs will increase exports
Conflicting Economic Madness
Points 1 and 2 conflict. Tariffs cannot simultaneously bring back manufacturing and raise enough revenue to balance the budget.
Points 2 and 3 conflict. Since the US is one of the world’s highest cost producer of goods thanks to unions, tariffs will not reduce inflation.
Points 2 and 4 conflict. Since the US is one of the world’s highest cost producer of goods, and other countries will retaliate, tariffs will not increase exports.
Tut Tut to the Skeptics
Some of you may be skeptical, but I am a true convert.
With Trump, there cannot be contradictions. It’s the same as asking an all-powerful God to create a rock so big he cannot lift it.
We resolve the dilemma by stating contradictions and Trump are illogical in nature and cannot exist.
Thus, we can have our cake, eat it too, and gather 20 baskets of leftovers to feed the poor.
Wait What?
Sorry, I just woke up. Wow, what a dream.
I was somewhere in Trumperland with Trump as the Red Queen giving me a lecture on believing impossible things.
Trump and Secretary of Treasury Bessent Discuss the “Detox Recession”
On March 10, I noted Trump and Secretary of Treasury Bessent Discuss the “Detox Recession”
Don’t worry, it’s just a little more pain and inflation disturbance before tariff greatness begins.
Economy Could Be ‘Starting to Roll a Little Bit’
On Squawk Box, Treasury Secretary Bessent said the Economy Could Be ‘Starting to Roll a Little Bit’
And Trump Declines to Rule Out Recession.
Lutnick vs Trump
“There’s going to be no recession in America,” Commerce Secretary Howard Lutnick said on Meet the Press on NBC News.
Somehow Trump and Bessent did not get the message from Lutnick.
I’m not sure how that happened, but I expect that to be quickly fixed now that Lutnick is calling the shots.
The Wall Street Journal had this interesting observation.
Commerce Secretary Howard Lutnick said over the weekend that the President’s tariffs would make some foreign products more expensive but “American products will get cheaper.” Huh? Companies that use foreign components will have to raise prices or swallow narrower profit margins. Does Mr. Lutnick understand, well, commerce?
Cheese Was a “Key Achievement” of Trump’s USMCA Trade Agreement
Meanwhile, please note that Cheese Was a “Key Achievement” of Trump’s USMCA Trade Agreement
If you are struggling with how that can possibly be, please please go to Trumperland where contradictions have no meaning.
“Trumperland Is a Safe Place,” much like academia only much better and much safer, void of contradictions as long as it is Trump who is making them.
Any questions?
The IRS is not a U.S. government agency. It is an agency of the IMF. Diversified Metal Products vs. IRS et al. CV-93-405E-EJE U.S.D.C.D.I, Public Law 94-564, Senate Report 94-1148 pg. 5967, Reorganization Plan No. 26, Public Law 102-391.
The IMF is an agency of the U.N. Black’s Law Dictionary 6th Ed. p. 816.
The United States has not had a Treasury since 1921. 41 Stat. Ch. 214 p. 654.
The U.S. Treasury is now the IMF. Presidential Documents Volume 29 – No. 4 p. 113, 22 U.S.C. 285-288.
“I think if you were to go back and try to find and review the ratification of the 16th amendment, which was the internal revenue, the ‘income tax’, I think if you went back and examined that carefully, you would find that a sufficient number of States never ratified that amendment.”
U.S. District Court Judge James C. Fox, Sullivan vs. United States, 2003.
“There’s a plot in this country to enslave every man, woman, and child. Before I leave this high and noble office, I intend to expose this plot.”
~ President John F. Kennedy, seven days before his assassination
Eliminating the IRS would also make the Federal Reserve non-necessary.
are you going to trade by seashells?
“1913 wasn’t a very good year. 1913 gave us the Federal Reserve System, the 16th Amendment, the Income Tax, and the IRS.” ~ Congressman Ron Paul
(Also 1913 – the creation of The Rockefeller Foundation, leading to the complete takeover of all medical education and research, and birth of Big Pharma.) COINCIDENCE??
“With Trump, there cannot be contradictions. It’s the same as asking an all-powerful God to create a rock so big he cannot lift it.”
I feel this is a deep and insightful observation. I’ve been reading history books to a child recently. The history of civilization is replete with this sort of thing. Trump himself said that people need to hear promises for the future that are really, really big and exciting, to the point of being unrealistic.
Does the fault lie with the person who offers the Kool-Aid or with the people who are in a hurry to drink it?
Or with both? From a civilizational perspective, it certainly looks like we do this sort of thing to ourselves, due to our inability to remain focused on, and accept, reality. That would take even more than a Libertarian government to change. 😎
Get rid of USURY! Period, across the board, no one deserves interest on anything. The banking system needs to be a service, not a business, would solve a lot of financial issues
Tariffs also started the US Revolution.
Since it has all been theft (resolution to steal 1913; theft started in 1929) , is the United States of America truly in debt or are we owed plus interest?
When you consider that the main functions of the Federal Reserve is to keep America a debtor nation and to make a profit for the investors in the Federal Reserve and that the “National Debt” is the interest the Federal Government owes to the Federal Reserve for borrowing our own tax money paid to the Federal Reserve from the previous year.
How did Mr. Lutnick (just dying to have immature fun rearranging two letters in his name) actually become rich? Always thought you needed to be at least somewhat clever to do that. Ah well. Should require something of an understanding of business or economics to be Commerce Secretary shouldn’t it?
Nutlick?
If anything, trade is going to decline everywhere… it seems like since 2008 everything has been clinging to the surface of a government debt bubble. We see signs of deflation and trade collapse or decline all around the world now.
As I look at Trump and what he’s done with Ukraine, NATO, Canada, Mexico, the only explanation that makes sense to me is Trump is being paid off by Putin to wreck America with ruinous tariffs, ruinous trade policies, constant lying, betrayal of allies and neighbors, while America goes further and further into a debt. The debt burden is now so large, there is no hope of paying it off. This was our condition in 1929 after the borrowing of the Roaring 20s, and we had a debt implosion. If you look at total debt to GDP back then, it was around 270 percent, and back then government spending was a much smaller percentage of GDP. There was no Social Security, Medicaid or Medicare. Now total debt in America, over $100 trillion, is more than 400% of GDP, so I expect a debt liquidation like we had in the 1930s with terrible times ahead for the average American. This year $9 trillion of low-yielding debt will be rolling over at much higher interest rates. Rates will probably move higher to sell that $9 trillion and $2 trillion more. By December interest costs alone on federal debt will be $1.5 trillion and going higher every subsequent year. There is no way out other than default, or printing the money, ZIRP, and more QE. We tried that and it led to economic strains and distortion because the price of money in capitalism can never be zero. Capital must have a cost and that cost should be determined by market forces, not a dozen political appointees on the open market committee.
Buckle up! It’s gonna be a wild ride!
For starters, they are all nuts if they think they can solve the deficit/debt problem with increased revenue, no matter the gimmicks, since that revenue must come from the private sector and that incremental revenue is a burden on the private sector profit generating capacity required to fund the government that does not generate a profit. The only way to fix the problem is to shrink the size of government.
Anyone thinking more revenue is the answer needs to read the golden goose story.
Nothing to do with your argument Mish, but I had been waiting to comment on this statement for a long time now.
‘It’s the same as asking an all-powerful God to create a rock so big he cannot lift it.’
Lifting is a concept restricted to a gravity well. If the stone is in space not under the influence of any other gravitational pull except its own, the question is moot. Philosophers without proper understanding of nature came up with such rhetorical argument to deny God. Shows how limited the questioner’s knowledge is.
Contradictions can’t exist by definition.
If someone is all powerful then by definition they can do everything.
Gravity has nothing to do with this.
Not in the world of logic.
The real world is full of contradictory stuff…
False.
Contradictions are internally inconsistent, and thus cannot exist.
This comment section is painful today.
Your assertion is false. The question: “Can (an infinite) God create a rock so big that he cannot lift it?” is logical nonsense; it is a category mistake. You are asking if infinity is bigger than infinity. And being infinite does not mean “they can do everything”. If you’re going to make philosophical assertions, do your homework.
Clarke’s Third Law: “Any sufficiently advanced technology is indistinguishable from magic”. Aside from that you are taking an obvious absurdist paradox too literally. By definition never being able to attain proper understanding means you can never prove a “god”, nor “deny” it.
They still haven’t done anything about unemployment/underemployment. U-6 is just becoming a large underclass of educated but unemployed citizens and replaced by someone on a work visa. I’m an immigrant and I think immigration needs to stop until every effort has been legitimately made to reduce U-6 down to something more reasonable. New college grads in engineering and technical areas are unemployed because of all the immigration. The irony is some of these kids’ parents came here on a work visa, got their greencard and now both parents and kids find themselves replaced by the latest immigrants brought here on bonded labor work visas. I see very little Trump has done. The bill in congress expands work visas and will put more citizens out of work. Is this the America any citizen outside of the billionaire wants anymore ? Elon told people to F themselves in the face when he was challenged on H1B visas.
You edited that to spread misinformation in your last line? Who’s paying you?
What if all this tariff talk results in the elimination of tariffs? Lower prices would spur a huge increase in economic growth and world trade. 🤔
Trump eliminate tariffs?
Look – that is what USMCA did.
Are you in Trumperland?
Over the long haul with everyone no longer living in trees and every country having a car assembly plant and steel plant and aluminum smelter, tariffs all go to zero. Tariffs are only good for exploiting a shortage that one country has in time. Over the long term they all go to zero.
aluminum production requires a lot of electricity. Thats why aluminum was worth more than gold until electricity was discovered and made widespread.
Most 2nd world countries have trouble supplying electricity for their population. Countries in Africa have days of the week and hours of the day when electricity is not transmitted to certain sectors.
The EU is having difficulty maintaining electricity generation. Aluminum smelters will only work where power is cheap, ie hydroelectric installations or possibly thermal generation via volcanic thermal vents.
And all such exploitation depends on having something of universal value to trade for them, such as “the spice” in Dune, or other magical items, like “money”.
Love the smell of napalm in the morning. I am looking forward to the economy going back to 2009.
I’d prefer 1911, before the Federal Reserve begin crushing the population.
Changing a direct and progressive tax by an indirect one benefits people with bigger incomes.
Tariffs are good for inefficient bussiness and hurt competitive products that could be exported. Bad for consumers,
On Mar 14 the gov might shutdown. Trump will accelerate its haircut. He will deplete its saving account in the Fed. The selling never stop. The econ is strong despite the doomsday industry bs. Payroll and realized gains taxes and new tariffs will fill the gov coffer. The Dow and SPX 1W breached July high. Option #1: the plunge, a vortex. Option #2: a spring.
So obviously Lutnick knows its contradictory. I just wonder what the real play is supposed to be? Is it just leaning in to a huge bluff? Seems that Trump was conned by his team in the first term in trade deals he doesn’t like now. He will likely get his way in the end on most of these. All very interesting.
Certain people need to get paid before the contradiction gets unveiled. Most of these guys are in it for themselves (else why bother) and once the expected benefit has been collected, then reality will be permitted. And they won’t care too much.
Tormach Daniel Rogge feared Trump tariffs and $8000 plus on pickup trucks he tripled production and imported 20% more from China, speculating on high inflation.. Results: inflation is down.
As Professor Pettis puts it, “Excessive use of the U.S. dollar internationally actually forces up either American debt or American unemployment”. As: “many of the new cross-border investors were governments”…”foreign governments recycling the inflow of both foreign direct investment and current account surpluses.”
The U.S. can be more creative than selling its birthright for a mess of pottage (becoming a financial hostage to the Pacific Rim), indeed, its Western plantation (“the capital account reflects net change in ownership of national assets”).
To be effectively competitive in foreign markets, requires that we sell lower unit costs and higher quality products. This means concentrating on production, innovation, and product quality. It means giving workers a financial stake in increased productivity (share in profits, etc.).
Excellent! The tariff war is back on again. 25% tariffs on ALL steel and aluminum imports. When do the tariffs on imported energy begin?
Let these wonderful tariffs bring back manufacturing and jobs, lower prices, pay off the deficit and debt, eliminate income tax, and lead us to the Golden Age!
What a show!
A little sarcastic arent we? Maybe Carville is right. Just let the bible thumpers destroy themselves.
It is a grand economic experiment! Let’s find out what happens and learn from it.
If it works like Trump says it will, I will save a bundle in income taxes.
If it blows up in our faces, we learn a lesson and move on.
Win, win.
More sarcasm, Pop? 🙂
Nope. I truly want Trump to put on as many tariffs as he wants. I want to see what happens.
It’s a bit of a sideshow, when the real carnage is in the debt mountains and UST sell-offs, and how that one plays out (implosion or explosion?!) and impending demographic valleys.
In the bad old days in the late 1960’s, when Canada had high tariffs, a stripped down Ford mustang was advertised for C$2,500 in Canadian newspapers/TV and US$1,776 in American newspapers/TV, plus local sales tax in each case. The Canadian price included a Federal manufacturer’s sales tax (about 11 or 12%), reflected the lower value of the C$ vs the US$ (about 92.5 cents US in those days) and most of the tariff that a Canadian buyer would pay at the border if he was foolish enough to buy the car in the US and tried to bring it back to Canada, owing to non-tariff barriers. In 1966, a 5 inch Samsonite attache case cost $25US in the US and C$50 in Canada. Samsonite had a small factory at its Canadian subsidiary in London, Ontario and each Canadian case came with a maple leaf sticker!
Right now, I am not counting on lower Federal income tax rates, but I’d be happy if the full SALT deduction were restored.
Mish,
Doesn’t his plan to eliminate the IRS and replace those revenues with tariffs essentially boil down to the equivalent of replacing the IRS with a consumption tax? It’s basically the same idea as replacing the IRS with a 10% (or whatever number is needed) national sales tax.
You yourself have discussed this very idea before (can’t recall whether you were for/against or just exploring the idea).
In other words, he’s floating the idea of replacing the IRS with a national consumption tax.
No, no no, and no.
No, Trump is not wanting to basically replace the IRS and income tax with a national sales tax, or he would say that.
No, tariffs are not basically a national sales tax because they are levied only on imported goods, not all goods.
No, a 10% national sales tax would not be near enough. It would be at least 22+% for every single item a regular consumer buys (in addition to state and local taxes added to that) to match today’s federal tax collections.
No, the majority of Americans (especially the MAGA folks) would go batshit crazy if Trump tried to actually make them pay their own way via a national sales tax (see above %).
10% was just a round number I picked for an example. I have zero idea what would be needed to get enough revenue. If you say 22% then 22% it is.
But it’s absolutely the same thing. It’s simply a trial balloon to see how the population reacts to the idea of a consumption tax.
BTW, even a consumption tax would not be on 100% of the goods. It’s always talked about that food and other necessities would either a 0 rate or a very low rate to help out lower income. That’s the equivalent of US made stuff having a 0 rate. In other words just picking which things you want to have a 0 (or low rate).
I don’t think you understand cause and effect. Tariffs would make domesticly produced goods and services cheaper than imports.
a sales tax would tax all sales – hence the name sales tax. yes limits could be established, categories removed or discounted, but the more complex it becomes the less reason to enact it.
Tariffs exist to level the playing field and make the dumping of cheap foreign imports expensive. This incentivizes domestic production of goods and services, which allows a nation to exist independent of its trading partners, by becoming self sufficient.
Self sufficiency is good for individuals and nations as well.
a sales tax exist soley to raise revenue.
a Tariff exists soley to level the trading system and make domestic production economically feasible and profitable.
Revenue from tariffs is how the national government was paid for before the federal income tax was enacted. (to pay for world war I)
Most of you probably don’t remember what happened to Congressman Al Ullman who in 1980 proposed a Federal sales tax when he was the head of the House Ways and Means Committee. He was defeated in the Reagan landslide that year and that was the end of his political career and the end of talk of a Federal sales tax.
Not the best example since Democrat Ullman narrowly lost his election and was impacted by Jimmy Carter’s concession speech occurring before Oregon polling stations closed. Also, anti nuclear activist Lloyd Marbet ran to Ullman’s political left and got almost 3 times the difference in votes.
If people don’t want to pay the tariff then don’t buy the product. You’re not forced to buy anything.
this is economically illiterate. for example usa only has 20% aluminum production that can meet current demand. So sure you can wave your flag buy USA rah rah, but at the end even usa aluminum is going to raise to match the increase based on lack of capacity/ usa producer raising prices because they can.,
In 1990 when the great Globalizationand free trade was trunpeted the US trade deficit was pretty much zero the budget deficit pretty much zero . Fast forward 35 years trade deficit is 1 trillion annually and the budget deficit is approaching 2 trillion annually and free trade and larger government has given you a 36 trillion dollar of accrued debt. There has not been one dollar of debt paid off and all that happens is continueing to roll over and more borrowing . So maybe trying a different path is not a bad idea because the one currently is not working .
We also had a small trade surplus with Mexico around 30 years ago. I get the outrage over tariffs but some hard decisions will have to be made if Americans want to go back to more favorable conditions. Do or do not. No try as the saying goes. So far I have not heard anyone laying out a real blueprint. Trump’s approach is more like demolishing an old kitchen. It’s messy business but do you want a new kitchen or not? Seems like many want the kitchen but want to keep the old one in the meantime. Not how it works.
It’s more like the side effects of the kitchen remodel means extensive damage to the living room, the dining room and most of the bedrooms in the house in order to get a slightly (maybe) better kitchen and then declaring the mess part of the price for that new countertop. Sure, it might be a better kitchen, but what about the extensive damage to the rest of the house?
Free trade is not responsible for larger government or increases in national debt. That is patently false.
It has never been equall trade or free trade. Different countries subsidise industries and tariff other countries products that would potentially run their native industries out of bussiness . Of course many want to keep the status quo but really 36 trillion and look at debt all over the world . Has it made anything better we have just borrowed a life style that has yet to be paid for .
So, your complaint boils down to you feeling bad for the foreign taxpayers who are being forced by their government to subsidize protected portions of their industrial base, i.e. special interest political constituencies, so we can have lower prices on imports here and you want to impose the same penalties on US taxpayers in order to create our own entrenched special interests dependent on the government for their existence.
I would blame much of the increase in the national debt on US military adventures abroad and on tax cuts.
If you think you have taken the wrong path while hiking, do you you head into a ravine instead?
If you’re out of water and that’s where the fresh water is, yes you do.
Making the world safe for tax-dodging oligarchs, that always works!
Bring back U.S. Grant !
Isn’t that one of them there ten commandment thingies.
Blessed are the Public servants for they are entitled to fill their pockets.
Joseph Biden sends regards for making his Life easy peezy.
So does Nancy Pelosi, AOC, Mittens Romney, Mitch McConnell, Warner, Ms. Pochahantas, Dicky Durbin, Chucky Schumer and those of lesser status do as well.
Congress could end the national emergency…
that allows Trump to implement tariffs willy nilly.
But they have shirked their responsibility…
to provide any checks or balances to King Chaos.
“The legal foundation of IEEPA, the National Emergencies Act, allows Congress to introduce a privileged resolution to terminate the authority, which must be brought to the House for a floor vote within 15 days.”
Republican solution: declare “that the remainder of days in the first session of the 119th Congress do not qualify as calendar days“.
Selected quotes from “House Republicans move to block vote on Trump’s tariffs”Link: Inside Congress Live
Welcome to Groundhog Day: same shit day…all year long.
Congress’s lack of oversight, its abdications (and behind it, the voting public’s tolerance for self-obsessed fantasies) represent the most pivotal failure behind the decay of our institutions, and the blunt-force stupidity of this concentrated power folly now.
Lutnick is correct. Tariffs can eliminate the IRS and balance the budget. The qualifier being the very big IF we reduce the size of our current government to something on the order of the US government ca. 1890. I’m fine with that, but most Americans are probably not given their addiction to government handouts in the form of Social Security and Medicare. Perhaps, perhaps, if those two large programs and associated welfare programs were to be eliminated, tariffs could pay for most of the rest of the DOGE-reduced government. Unless and until then, Lutnick is deliberately lying because I cannot imagine he’s actually so stupid as to believe what he is saying.
Not everyone has a big backyard filled with defenseless animals waiting for your weekend-machine-gunning them onto your dinner table. And yes, he is stupid enough to believe what he’s saying. They are ALL stupid enough to believe what they are saying
Reshoring the tax base helps a lot. Put every welfare parasite on a payroll and off medicare too. Social Security, AFDC, EBT can be inflated to zero expense.
F.D.Roosevelt was the criminal socialist who set up the Social Security Ponzi scheme. D.J.Trump is the superman capitalist who can fix it with a wrecking ball.
Yet Trump has explicitly stated that he will not touch SS or Medicare, thereby making his “wrecking ball” more on the order of a cotton ball.
Also, reshoring the tax base isn’t a great deal if doing so actually results in a shrinking tax base. And explain to me this concept of “inflating to zero expense”; inflation and zero expense would normally be mutually exclusive concepts.
see Mish chart. not touching SS or Medicare means you are not serious about balancing the budget
Exactly.
ok well then say goodbye to social security. You will be 100% on the hook for taking care of your elderly parents and any disabled children. Have fun with that
So, you mean nobody would ever save ever again if they weren’t forced to contribute to SS? And the horrible thought of children caring for their elderly parents is just to terrible to contemplate. I mean who would want to provide for their families when they can be turned over to the tender mercies of an all-encompassing and intrusive state bureaucracy? I mean, what could possible be better for our families than to trust not in the bonds of filial piety and obligation but in the bureaucratic functionaries trolling the sterile halls of DC?
“Thus, we can have our cake, eat it too…”
Recently read reference to the shuffled version of this saying and now this arrangement feels quite wrong even though it is used almost exclusively.
https://interestingliterature.com/2021/07/you-cannot-have-your-cake-and-eat-it-proverb-meaning-origin/
Trump can pick King Charles mind on tariffs when he visits. His minion Bermuda has the highest tariffs on the planet. How does he make this magic work? Maybe it has something to do with that triangle mystery.
Queen Charles
yawn.
“Lutnick Says Tariffs Can Eliminate the IRS and Balance the Budget”
They will also clean your oven, wax your vehicle, shine your shoes, and eliminate unpleasant odors!
In all seriousness, this isn’t the early 19th Century so trying to pitch a single revenue source as being able to cover all .gov outlays at the federal level is not believable by any stretch of one’s imagination.
Tiny governments have tiny outlays.
As a rule that can be the case, but how is that relevant to the U.S.?
Do you really think the current behemuth will be DOGEd down to “tiny” in less than 4 years.
2+ 2 = 5 = Tarrifs
Eliminate the deficit spending =1
We can all agree on 1
Perhaps 100 years ago when all the trade people were Ivy-league insiders and other nations were run by the unwashed. But now every nation has smart people and car factories and wants to use tariffs to get something for nothing. Trump’s glory days have come and gone — everyone is now in the “know.”
When politicians go on TV and say something isn’t going to happen, it’s very likely that exact thing is going to happen. Just waiting for some banker or politician to say that the banking system is sound, that’ll be right before the next collapse.
The ugly bestial amalgamation of commercial real estate defaults, residential mortgage defaults, student loan defaults, auto loans and credit card defaults piling up and a slowing economy coupled with job layoffs, it’s only a matter of time for the Trumpocolypse™ to happen and it will be 100% owned by Trump and the GOP.
100%
– commercial real estate defaults.
> Banks /Lenders
– residential mortgage defaults.
> Banks/Lenders
– student loan defaults.
> Banks/Lenders
– auto loans.
> Banks/Lenders
– C/C Defaults.
> Banks/Lenders
– Layoffs
> Companies/Businesses
100% owned by Banks / Lenders / Businesses
Unless Trump Co-Signed, and then You may have a point, albeit a really small one…
Any president would want his first year to be a recession/depression. He cant be removed easily and makes them seem all that more kingly when their 4th year has a great economic awakening. He will blame any economic slowdown on someone else — every time.
How can it be 100%? The die was cast for most of the factors you listed well before 2025.
I remember that all analyst had Enron as a “strong buy” the day that it’s scandal broke the news (and they went to zero).
Mish, how many unfortunate folks in the IRS and private sector lose their jobs if the personal income tax and IRS went away?
Wrong question
Lots. Tho the number of bond dealers will go way up as they try to find rubes and addle-brains that would buy creaking Federal debt, which would skyrocket.
– how many unfortunate folks in the IRS and private sector lose their jobs if the personal income tax and IRS went away?
A loaded question, but here’s a shot at it for you…
1. All of Them?
2. All of Them, but the Prepared?
3. The ones that don’t find employment elsewhere?
4. The ones that needed a job?
5. The ones not qualified?
6. The ones that spend money, before it’s earned?
A very large list, so I will stop there, but you may add more if you would like…
This is really good, direct, straightforward analysis. It’s clear, and it demonstrates the delusional absurdity of Donald Trump’s economic agenda. Trump – by his own words – has indicated he seeks to destroy the car-making businesses in Canada, with high tariffs, if Ontario applies retaliatory tariffs. So, with business destroyed, how does he expect to actually collect serious revenue from this action? It’s all just hilarious – like a new version of “Waiting for Godot”. The Trump folks seem to be truly delusional with respect to economics. Your analysis is spot on. Reminds me of J. M. Keynes’s piece, “The Economic Consequences of the Peace”, where Keynes showed that Germany would never be able to pay the reparations demanded by the World War One peace treaty. It was also correct. Arrogant leaders seem to fall into madness. It’s a real theme in history – and it’s also a prime driver of national self-destruction.
I fail to see how you folks can denigrate a man who has twice been elected by a well-informed citizenry made up of verifiable geniuses. He obviously is blessed with an inside knowledge of the “new math” and “new economics”. We’re all going to get a Tesla in our Christmas stocking, paid for by those DOGE corruption cuts. I’d like a red one, of course.
He continues to be elected (the next time he wont bother going thru the election process — he’ll just never leave the White House) for the same reason the TV ads keep getting you to buy the softer Charmin toilet paper versus the stronger stuff. People are busy and distracted and they make bad decisions. Hitler was actually elected in 1933.
Well-informed? I don’t believe it.
Yeah and I’m going to win all 100 bracelet events at the World Series of Poker this year.
Downsize the government to its constitutional level and Uncle Sam won’t need nearly $7T/year.
It’s true that tariffs will tax consumers but so does every other tax! So what?
The budget must be balanced, and the domestic economy boosted, because interest costs are going to eat us alive.
Because there has already been a massive wealth transfer to the top 10%. Deficits, artificially low interest rates, and inflation benefit those with assets and the wealthiest peiple and corporations first in line to receive special financial and regulatory benefits. So to “even things out” we are going to make it even more expensive for wage earners to exist?
To even things out we need increased economic competition, which reduces profits and increases worker’s income as a share of total output. You can get that from tariffs and antitrust regulation.
You won’t get that by fiddling with income tax rates or letting inflation run rampant because we failed to cut spending.
Also need to reduce the economic overburden of government’s non/productive (but expensive!) workers, whose pay and consumption is taken via taxation from the genuine producers.
The top 10% create all the wealth. The bottom 90% are lucky to have jobs and come along for the ride.
This is blatantly untrue. Many of the top 10% by assets inherited their wealth or got lucky in other ways. And they would have no wealth whatsoever if it were not for the work of the productive 50% who actually do the work.
Anyway, the main issue is that corporate profits as a share of GdP are at/near historic highs whereas workers’ income share is near historic lows. That is the origin of the current extreme wealth inequality and it’s not sustainable.
The real reason is the financialization of assets that has occurred over the last 40 to 50 years that has been enabled by our preference for a fiat money system. Remove that fiat money system and odds are you’ll see corporate profits stabilize and wealth inequality subside.
Agree about fiat=bad, but the Victorian era disproves your theory that fiat currency is the main cause of wealth inequality.
What keeps corporate profits at reasonable levels is healthy levels of competition. That competition drives demand for workers and raises their share at the expense of the owners.
yeah all those Walton kids…. all 4 of them earned ever last penny of their $50B bank accounts, by sitting on their keisters and inhereting it.
Who do you think holds the credit on the other side of debt service?
Ain’t the Martians.
Budget hasnt been balanced since Carter and your refrigerator is full and your lights are on, so maybe a balanced budget isnt such a priority when you have lots of new billionaires who need Treasuries to hide their wealth. Someone is buying all the US debt.
Schmucks win the lottery and are poor a year later. The 1% invest a windfall in wealth creating tools and ideas.
Dumb moves can be made by anyone. 😉
Lutnick = Lun&tick
it is not his fault. He was born like that.
When some one explains how AOC, who is typical for Washington, goes from elected Barmaid unable to afford rent in DC, now worth 29 million and counting then they can make a case for IRS.
Otherwise IRS serves only one purpose that is to enrich a political elite.
Fleecing the rest of Country and concentrating wealth of this Nation in hands of a few.
IRS needs to get chopped off at the knees.
Yep just keep paying those taxes then complain how there is no money available to afford owning anything.
Upscale refrigerator boxes are available for those inclined.
Has anyone seen those hot design double decker refrigerator boxes?
I swear, they are just to die for.
Dont forget to blame Biden, LBJ, FDR and Jesus. Blame everyone but the joker actually in power for almost 2 months.
Ah, your refrigerator box must be too small to house those barnyard friends.
That is a shame Just think if you had some of those Tax dollars so willingly sent in to DC elites courtesy of the IRS you might be able to afford to have a Life.
Me, I just brought in another load of compost to be spread on my Fig trees. But then I am a dinosaur who believes in keeping some of what I earn over a Lifetime.
By the way one year ago I was paying $22/ yd for compost picked up at supply house. Is now$30/yd.
Wasn’t Biden just wonderful?
Where did you read that her net worth is $29 million?
Original article was posted at ZeroHedge. I scrolled back to Feb 26 was unable to locate it. Article was in essence a demand for accountability and headlined I want my money back.
Since that effort proved futile I just googled net worth of Congress people.
One lead that popped up immediately was yahoo finance which lists net worth and annual salary of a couple congress people
https://finance.yahoo.com/news/elon-musk-questions-congress-members-190016734.html
There were other leads as well but my understanding is two web links gets a post held up by Mish robot so I just put up one lead that was common sourced.
What is of interest is peoples net worth compared to salary. Fairly glaring for those such as Pelosi, Schumer who have spent great part of their lives at Public trough.
First, I agree with you Mish that the details of how this would actually happen have not been explained and that this is impossible.
BUT…this is really just a philosophical and theoretical 180-degree flip of extreme MMT (which is also impossible)
The theory of how it works (which is also BS):
ANY government product or service is ‘useless’ and/or ‘theft’, so cut it all by at least 50%;
50% less government means the ability for 50% less taxes (we won’t worry quite yet about the unemployed government workers or the support/benefits they will need);
Now we’re all ‘rich’ with our ‘own’ money;
We’ll spend all that ‘extra’ money on US products, so ‘everyone’ will have a job (and a better paying one) – but with ‘no inflation’ because we’ll be more ‘productive’;
We’re now literally twice as ‘rich’ as we used to be, so let’s cut taxes all the way to 0%;
We can now ‘spend even more’ of our increased riches on foreign products as well;
We can tax/tariff those at 100-200% (since we’re so rich) and pay for ‘limited’ government.
Since this is guaranteed to work, let’s just start at the end instead and go backwards. It will work exactly in reverse as forward. And it’s ‘guaranteed’ to work. That is how this theoretically works.
As a bonus every fired government cipher is qualified to work at Walmart and our labor shortage is solved.
Do you remember the movie the “Bad News Bears” with Walter Matthau, when he says “never assume…”, and spells it out on a chalk board?
I am reminded of that seen when I read this article.
The temptation is to not reciprocate to the tariffs and find another buyer instead. I need to think this thru some more. Placing tariff on ALL aluminum imports, nobody will reciprocate.
to reciprocate makes no sense.
to retaliate is an option if the product can be sourced elsewhere.
All countries got rid of debt by paying it off. If the debt is not payable, it will not and it will be inflated away. Regardless, the people always pays, directly or indirectly.
He must ride a unicorn to work.
Income tax is a crime and needs to go. No citizen should have to defend themselves against the state every year just to keep their own earnings.
The founding fathers never envisioned such direct taxation, only indirect taxation — such as tariffs.
So this is a positive step. How to get $7 trillion is obviously a stretch right now, but you can’t find solutions and move to a better system without such disruptions.
End income tax, end the IRS. Find the way,
Regardless, citizens will not keep their earnings, just like the Founding Fathers envisioned it.
What would all the tax accountants and attorneys do? Hopefully something productive.
Us former Federal Fed employees would like nothing better than to stop services to ungrateful people who keep coming to us crying and begging for something to be done. But, they keep coming. Next time go to your church for help — since that strategy worked so well during the Gr depression. We really dont want to deal with you, as in most cases you got yourselves in trouble.
All you did was exchange a deflationary depression for an inflationary one where it will be harder for the poor to survive.
From the looks of you you are well fed. Stop whining, taxpayer. 🙂
Not whining, just making an observation.
And I assume you are a Federal income taxpayer. Half of adults pay no Federal income tax at all, and continue to whine and complain and ride for free. :):)
On the cusp of gov shut down the Trump administration cut 50% of of the Dept
of Edu. More will come. First the IRS, before sucking the air DC.
DC income per capita is the highest in the world : $260,000, x5 times more than in
Mississippi or Germany. Hakeem zombies go berserk: Trump’s tariffs reduced inflation. Trump’s “stress tolerance” is high after surviving two impeachments and two assassination attempts.
Trump’s tariffs reduced inflation? That is just factually incorrect. The rate of inflation held steady despite Trump’s tariffs because prices fell or held steady in those areas of the economy that were not subject to Trump’s tariffs. Where his tariffs were imposed, prices increased substantially for domestic producers reliant on the tariffed goods.
Man, you gotta quit huffing the MAGA fumes. You think it’s the GOVERNMENT employees making $260k/year and not the massive army of lobbyists? Honestly, that’s just laughably stupid..
I apologize in advance, for not reading the story line, but isn’t this the same Fool?
“There’s going to be no recession in America,” Commerce Secretary Howard Lutnick said on “Meet the Press”
This guy needs to be replaced perhaps? Is he related to Biden? I can’t stand it when people state absolutes, in Politics. It’s never, ever about one person and their thoughts and opinions, that gets stuff done. Yet this guy states with certainty, things that he has zero control over, and in his position, has no right saying so imo. Maybe he’s a RINO.
Lutnick: “He’s not getting a job for HHS.”
Kaitlan Collins: “He would not be in charge of HHS?”
“No,” Lutnick said, “of course not.”
I would not listen to a word that guy says.. he’s Trump’s biggest fluffer in a cabinet full of them.
Lutnick is another hypocrite piece of cr—- billionaire who is working to get huge tax cuts for his fellow billionaires and pass the tax burden to ordinary people. Pathetic.
Most inflationary president ever to take the oath.
Not yet, and Old Joe is very stiff competition to beat.
Who signed the CARES act?
You mean: Obamacare?
You dont strike me as a mentally stable person.
Trump does not care about debt, deficits, inflation or unrest. He has always been protected from the real world, and we are just game pieces on a monopoly board. He hates everyone who didnt bow to him the past, and the future effects of him being in charge of anything has yet to be revealed.