Be Careful What You Wish For: Trump's Plan To Smash America's Economy

If you think inflation and prices are bad now, just wait till you see Trump's economic plan for America.

Image via PBS

by Bob Cesca

WASHINGTON, DC – It’s no secret that prices have gone up since 2021. I discussed one of the reasons why it happened a few weeks ago – you can read the entire thing here. But in case you don’t feel like recapping, I’ll cut to the chase: corporations are engaged in obvious price gouging: padding profit margins under the cynical notion that voters will blame President Biden and the Democrats, which they are, instead of the CEOs who are actually responsible. In addition, real estate capitalists are being prosecuted for price fixing, making it more difficult to find affordable housing.

Nevertheless, there are still scores of 2020 Biden voters who are seriously considering voting for Donald Trump or a third party alternative, chiefly because of prices. I’m in no mood to candy-coat: it’s an unforgivably stupid trade, giving up democracy for the fool’s hope of 2019 prices under would-be fascist dictator Trump. 

What makes the trade even more ridiculous is that Donald will not make prices return to 2019 levels (when there was still inflation just before the catastrophic Trump recession). In fact, he’ll make prices climb far beyond anything we’ve ever seen, risking economic calamities of epic proportions – that is if he doesn’t trigger another deep recession in the meantime like literally all Republican presidents have in the last hundred years.

In case you think I’m being hyperbolic about prices under a second Trump presidency, former Clinton Treasury Secretary and Obama economic adviser Larry Summers told The Atlantic’s Ron Brownstein, “I have little doubt that with the Trump program, we will see a substantial acceleration in inflation, unless somehow we get a major recession first.”

Likewise, Mark Zandi from Moody’s Analytics said, “If [Trump] got what he wanted, you add it all up and it feels highly inflationary to me.”

The reason they’re saying what they’re saying is primarily due to Trump’s proposal for a 10 percent tariff on all imported goods. Tariffs are taxes or duties paid to the government by U.S. based importers, not the Chinese government or any other foreign entity. Trump doesn’t know this information, evidenced by myriad versions of this: “First of all, China is paying. They're paying billions and billions of dollars.” No they’re not, dummy. Americans are.

The cost of the Trump tariffs would, as always, be passed along to consumers. The Center for American Progress estimates that a 10 percent tariff would cost an average American household an additional $1500 per year. That’s essentially a $1500 tax hike for families. Making matters worse, it’d be a regressive tax, meaning lower and middle income households would pay a greater portion of their incomes than wealthier Americans. More about that later.

If you think that’s bad, higher prices for imported goods would give domestic retailers an excuse to raise their own prices to match, further augmenting profit margins and worsening inflation.

Of course, the Fed could curb the worst of the inflationary pain… by raising interest rates. Higher interest rates would make it even more expensive to buy a home, worsening the housing crisis. 

Ron Brownstein added:

But those higher interest rates would come with their own cost: Zandi projects they would depress the growth in total economic output and personal income below current policy, and raise the unemployment rate over the next few years by as much as a full percentage point—even as inflation rises. Raising the specter of the slow-growth, high-inflation pattern that hobbled the American economy through much of the 1970s, Zandi told me, “It is really a stagflation scenario.”

But, shockingly, Trump’s 10 percent tariff is far from his worst plan for the economy. 

Last week, while meeting privately on Capitol Hill with supplicant congressional Republicans, Trump proposed the idea of eliminating the income tax entirely and replacing it with tariffs, according to reporting by CNBC. You might snap to the conclusion that this is a great idea – no more income taxes, no more tax returns, no more IRS breathing down your neck. On the contrary, this is a catastrophically bad idea.

According to Adam Hersh, a senior economist with Economic Policy Institute Action:

…to make up for the roughly $4.2 trillion in revenue generated through income taxes, the across-the-board tariffs would have to be somewhere around 120% or 130% on incoming goods. In other words, consumers would effectively have to pay an additional sales tax of up to 130% on any imported item. 

Put another way: the current rate of inflation is 3.3 percent, year over year, on its way to a Federal Reserve target rate of 2 percent (which would be lower than Trump’s pre-COVID inflation rate). The highest inflation we’ve seen recently was 7 percent in 2021. 

Now wrap your head around the idea of 130 percent inflation – more than double the price of imported retail and grocery items, based on current 2024 prices. That’s what you’d be paying for imported goods if Dictator Trump gets what he wants – and most dictators usually do.

Hersh described this as similar to “dropping a nuclear bomb on a hurricane.”

Returning to the idea of a regressive tax punishing lower income families, the bottom 20 percent of earners would see a 25 percent reduction in after-tax income, while the top one percent would see a 20 percent increase in income, according to a chart published by the Center for American Progress.

Voters abandoning Biden because of prices need to be careful what they’re wishing for.

There’s yet another wrinkle to this plan. The blindingly high prices would significantly reduce demand for imported items, which means the Trump Regime would have to raise the tariff rates even higher than 130 percent or risk exploding the deficit and the national debt, possibly bankrupting the federal government – including Social Security and Medicare.

And tariffs are only one prong of Trump’s ludicrously stupid agenda.

A recent CBS/YouGov poll indicated that 62 percent of American voters support Trump’s plan to round up, incarcerate, and deport migrants who are in the country illegally. Trump and the 62 percenters might not realize that anywhere from 30 to 50 percent of U.S. agricultural workers are undocumented migrants. Cutting that labor force in half would cause a massive food shortage, triggering equally massive prices for groceries. Imported food comprises 15 percent of our total food supply, including coffee, fruit, and vegetables – all subject to Trump’s utterly moronic tariffs.

Stephen Craven for CNN:

The food supply would crash, and farmers’ labor costs would explode. The price of food would skyrocket. And going out to eat? That would get unimaginably expensive, as nearly 10% of the restaurant and hospitality workforce is believed to be undocumented, as well.

None of these statistics and forecasts take into consideration Trump’s plan to de-regulate corporations – the price gougers who are absorbing more and more of our incomes.

I can’t tell you how nearsighted and financially suicidal an idea it would be to vote against Joe Biden – who’s reducing prices and going after the price gougers, and whose economic record is robust and booming, the best in the world – in the hopes of lower prices under Trump. 

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Not only would this convicted business fraudster end democracy by refusing to leave office for fear of being prosecuted and imprisoned, but he’d stack the Supreme Court with young MAGA jurists, locking down a hard-right Court for 40 years thus repealing gun control laws, voting rights laws, and worse; he’d fire 50,000 federal employees and replace them with loyalist drones; he’d significantly exacerbate the climate crisis; he’s turn the Justice Department into his personal gestapo; he’d authorize a national abortion ban; and – yes – he’d crash the economy while bankrupting millions of Americans.

If there’s one thing that can blunt the potential surge of voters reacting to the overturning of Roe v Wade, it’s this misguided move to support Trump because of prices. And once these voters realize he’s skyrocketing prices, it’ll be too late. No impeachment. No 25th amendment. No possible way of voting him out in 2028. We’ll be stuck with him.

Please, for the sake of everything we cherish, vote wisely.

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