Loading ...For now it looks like Trump might have to raise the debt ceiling to get the tax breaks through that are going to reset if they don’t.
Yep. The numbers don’t add up.
The USA imports $4tn p.a. If you had a 50% tariff on everything and people paid it then the govt would have it’s $2tn to cut income taxes so people could afford the 50% tariffs – but that does nothing for the deficit. Except, people haven’t got the tax reduction so can’t afford all the tariffs, so trade contracts, the govt can (as you say) only afford tax cuts by borrowing (printing) more as the tariff income isn’t high enough, and round ‘n round ‘n round it goes.
In any case, nobody is going to pay a 50% tariff. But less than that, say 10% or 15% which wouldn’t cause demand destruction, doesn’t fund anything. Danged if I can see where Trump is going to pull the rabbit out of the hat here.