re: Model: 2025 tariffs would result in -$3,800 per household, GDP shrinks by 0.8% over decade

Just like CLIMATE CHANGE model

Right

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This is the dumbest post in a sea of dumb posts.

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If you think it was a dumb answer, what did you think of the question?

I thought the guy got the answer the question deserved.

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Why is it ok for other countries to tax our goods, but we're not allowed to tax theirs?

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You buying into silly leftist rhetoric is sad.

The framing of it being "OK" is silly. It's suboptimal policy. Why do you want to promote that (via government intervention) here?

Also, are you promoting this intervention to create jobs here or force other countries to stop making suboptimal decision-making?

Friedman covered this decades ago

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The interesting question, and the question I want to explore with you today, is why is it that interference with international trade has been so widespread, despite the almost uniform condemnation of such measures by economists? Why is it that you have the professional agreement on the one side, and observe practice on the other which departs so sharply from that agreement? The political reason is fairly straightforward. The political reason is that the interests that press for protection are concentrated. The people who are harmed by protection are spread and diffused. Indeed the very language shows the political pressure. We call a tariff a protective measure. It does protect; it protects the consumer very well against one thing. It protects the consumer against low prices. And yet we call it protection.

Each of us tends to produce a single product. We tend to buy a thousand and one products. If we impose a tariff on steel, or restrict imports of steel in other ways, the people who benefit are visible and clear and available and apparent. They have a very strong interest to press for restraints in that respect. The interests of the rest of us are very diffuse. Each of us will pay a few pennies more. We don't have the same interest to oppose it.

Let me take a much more extreme case that you may think does not come under the heading of protection but yet it does. We have a program of subsidizing the merchant marine, the maritime industry. That is really protection because what' we are doing is taking measures to prevent the use of foreign ships, that is, of importing the services for transporting goods. Those measures to benefit the merchant marine through ship building subsidies, through operating subsidies and so on, involve a total expenditure each year of roughly $600 million. That amounts to about $15,000 per year for each of the 40,000 people who are affected. You may be sure that they have every incentive to spend a lot of money on lobbying, on giving contributions to political candidates, and so on to see that continued. But $600 million with a population of two-hundred million people, that's three dollars apiece for each of us. Which one of us is going to go to Washington and lobby our congressman to avoid that extra three dollars of taxes?

While, on a superficial level, it's very easy to see why we have had tariffs and other restrictive measures such as the maritime subsidies, such as the recent import quotas, because producer interest is concentrated and consumer interest is diffused, that alone is not really a fully satisfactory answer. Let me take another example of exactly the same thing. Why have we had price supports of farm products to take up a subject of special interest here where there are special interests? (We're all of us special interests; it's only the other fellow who's a special interest.) Why have we had farm price supports? You will find it very hard to find any economists who will support farm price supports. This is another case in which the consumer is simply being protected against low prices. Why do we have them? Because the agricultural interest has been concentrated and the consumer interest diffused and widespread. Because you have a relatively small group of people who regard themselves as having much at stake and therefore they are able to be more effective politically than the diffused consumer interest.

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The basic reason I believe why economists have not been able to persuade the public is the one that I have already alluded to. It is suggested by the title of a famous essay which was written many years ago by a great economist, Wesley Mitchell. The title of his essay was "The Backward Art of Spending Money." And he asked, "Why is it that we are all of us so sophisticated about the activities in which we earn our living and tend to be so unsophisticated and backwards in the ways in which we spend our money?" And his answer was the one I have already mentioned: that each of us tends to be involved generally in only one kind of productive activity. We spend our working life, forty hours a week or sixty hours a week, whatever it may be, as a worker producing a product, as a merchant distributing a good, as a professor, well, forty hours a week teaching is a little long, but we're supposed to be putting in that much time on related ancillary activities and most of us do. On the other hand each of us buys a thousand and one things and it's perfectly understandable therefore that we devote far more attention and far more interest to the way we get our income than to the measures that affect how we spend it.

Unfortunately, this backward art of spending money leads to erroneous views in many directions and not only in the area of the tariff and of protection. For example, public discourse tends to be carried out in terms of jobs as if a great objective was to create jobs. That's not our objective at all. There's no problem about creating jobs. You can create any number of jobs by having people dig holes and fill them up again. Do we want jobs like that? No. Jobs are a price; we have to work to live, whereas if you listen to the terminology you would think that we live to work. Some of us do. There are workaholics, as there are alcoholics, and some of us do live to work. But in the main what we want are not jobs; we want productive jobs. We want jobs which will enable us to produce the goods and services we consume at a minimum expenditure of effort. In a way, the appropriate national objective is to have the fewest possible jobs, that is to say, the least amount of work for the greatest amount of product.

In the international trade area, the language is almost always about how we must export and what's really good is an industry that produces exports. If we buy from abroad and import, that's bad. But surely that's just upside down as well. What we send abroad we can't eat, we can't wear, we can't use for our houses. The goods and services we send abroad are goods and services not available to us. On the other hand, the goods and services we import provide us with TV sets we can watch, with automobiles we can drive, with all sorts of nice things for us to use. The gain from foreign trade is what we import. What we export is the cost of getting those imports. The proper objective for a nation, as Adam Smith put it, is to arrange things so we get as large a volume of imports as possible for as small a volume of exports as possible.

This carries over to the terminology we use. I have already referred to the misleading terminology of protection. But when people talk about a favorable balance of trade, what is that term taken to mean? It's taken to mean that we export more than we import. But from the point of view of our well-being that's an unfavorable balance. That means we are sending out more goods and getting fewer in. Each of you in your private household would know better than that. You don't regard it as a favorable balance when you have to send out more goods to get less coming in. It's favorable when you can get more by sending out less.

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Some of y’all should not be having discussions about tariffs or economics when you don’t really understand it. The reason why the threat or implementation of tariffs will bring some manufacturing back is because the companies who left to avoid tariffs would no longer have to avoid them. It’s the same principle behind many Asian car companies moving production here, it lowers transport cost and avoids tariffs. We cannot continue on the path we are on economically and the sooner you realize that the more you will understand the threat or implementation of tariffs. It may not work but continuing to spend three trillion dollars a year to prop up an economy that barely outpaces inflation is unsustainable

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the companies who left to avoid tariffs would no longer have to avoid them

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Wait ... what?

American companies left domestic production to avoid tariffs of countries too poor to buy their goods?

Is this model anything like the climate change models we have been seeing the past 40 years?

See where I am going with this?

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American companies left domestic production to avoid tariffs of countries too poor to buy their goods?

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Had someone tell me today that the only reason we don't export US cars to europe is becaouse of their tariffs.

In reality, US vehicles are too large, too heavy (because of FMVSS), unsuitable on eurpoean roads and expensive as hell due to exchange rates to boot.

The one thing I've learned from all this is just how insulated americans are from the reality of the rest of the world .

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Not like that's biased or anything.

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I know. I basically posted this same thing yesterday and threw it out there that this could be them wanting to keep the status quo… but it could also be genuine and agreeing with the conclusions. We’re represented by one of the organizations and I can tell you that costs are going up. What that means in the long term I can’t predict. Short term is easy: pain.

The tariffs are for negotiating - people are stupid