In 1930, at the height of the depression, Congress passed the “Smoot-Hawley” tariffs, which were very similar to Trump’s recent actions. Please go to the internet and find a Newsweek article on it. While we are not now in a depression, and I hope we will not get into one, from Trump’s tariffs, I think it is possible. I am writing this on Friday, and we will see what Monday brings, but I want to point out a few facts about Trump’s tariffs.
First of all, I am still remembering what our new Secretary of State said on Wednesday, and that is that ‘tariffs are taxes, and the Constitution says that the Congress passes tax laws, and not an executive order.’ Could the Supremes put a stop to Trump’s tariffs? I hope so.
His saying that all of the various corporations and companies which are going to move here and spend hundreds of billions of dollars to do so, is wonderful! However, before this can take place, a lot of land has to be acquired, zoning approved, architectural plans done and approved, construction contracts let, financing obtained, manufacturing machinery obtained, and above all of that, employees hired and trained. Isn’t it possible, that this can take a number of years? Is there any way Trump’s telling us about all the manufacturing being returned to America, could take less than a few years????
In the mean time, what will happen to current manufacturing being unable to get raw materials for their products, and even medicines, which come from abroad? The answer has to be, that all products needing foreign materials will cost a lot more, and these costs will be passed on to consumers, and this could easily foster a real depression. Foreign nations will pass their own tariffs, as happened in Soot-Hawley, and American exports will falter, exacerbating our exports, and our producers may go broke, because of a lack of exports to foreign nations.
Between higher consumer prices and failure to export, wouldn’t that be a depression? Trump says, ‘It will be tough at first, but it will work out OK, and America will once again make what it consumes.’ I love Trump, (not as much as he loves himself), voted for him, sent him money, and he loves America, but what he wants, fails to take in the five years all of this can take place! This is my opinion, and if I am mistaken, please tell me how.
ARGENTINA
Argentina’s President Javier Milei took office in December of 2023, and in his first month in office, he cut Argentina’s budget by 30%, and balanced it. Milei has reduced inflation from 25%, per month, to 2.2% per month. I can’t imagine it in America at ether rate, but Argentina was on the very brink of becoming a failed state, and was ripe for a communist takeover. Wages have increased and the poverty rate, which was at 40% under the previous president, has fallen well below that.
In his first year in office, the number of ministries has been reduced from 18, to 8, eliminating some, and merging with others. 37,000 public employees have been fired so far, and the reduction in bureaucrats, continues. An average of two regulations, have been eliminated each day, so far. This deregulation or elimination of just about every unnecessary bureaucrat and regulation, has caused prices to go down by 30%.
Milei ran for office, pledging to substitute the peso, which had become virtually worthless, with the U.S. dollar, and it has just about happened.
In an address celebrating is first year in office, Milei said, ”We will continue to eliminate agencies, secretariats, public companies, and any other State entity that should not exist. As the state gets smaller, liberty grows larger.”
Buenos Aires Argentina, has always been one of the most beautiful cities in the world, and with Milei as President, it may once again be a suitable place to visit!
Argentina’s President Milei has done all of this, without a single tariff. He has merely cut incredible government waste, balanced its budget, and cleared Argentina’s ‘swamp.’ Wouldn’t it be far better, if Trump had stuck to that, and not angered everyone, world-wide, by his obviously shallow conceived tariffs? We would all be a lot happier!
Don Stott- don@coloradogold.com