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OT: American Politics

worm said:
And the tariffs don't cover the increase?
Click to expand...

The lol answer is lol.

The real economic answer is...it depends. Because a tariff is just a consumption tax, so sure in theory you could jack tariffs up high enough to cover the additional costs....but then that will slow your economy down because of less consumption (high prices mean people buy less stuff), which will cause borrowers to want even higher interest rates, so on and so forth.

That is indicative of an economic event called stagflation. A stagnating economy with increasing price inflation. Nightmare scenario.
 
MindzEye said:
The lol answer is lol.

The real economic answer is...it depends. Because a tariff is just a consumption tax, so sure in theory you could jack tariffs up high enough to cover the additional costs....but then that will slow your economy down because of less consumption (high prices mean people buy less stuff), which will cause borrowers to want even higher interest rates, so on and so forth.

That is indicative of an economic event called stagflation. A stagnating economy with increasing price inflation. Nightmare scenario.
Click to expand...
Fingers crossed
 
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