“It is important to realize that what those benefited by these measures (tariffs) consider an advantage for themselves lasts only for a limited time.” Ludwig Von Mises

Up until the passage of the 16th amendment in 1916, the federal government was funded by tariffs and excise taxes. This was before the State became the behemoth it is today, consuming an ever more percentage of resources ever year and drowning out private investment. Back then its ability to grow was constrained by the fact that taxes were limited and also because the country was on the gold standard. That was before the days of the FED, when dollars could not be printed to fund deficits.

Today, the tariffs are popular again. President Trump is using them as a tool to fight trade wars on all sides. He says that the trade deals made by his predecessors were stupid. I have to agree with that. If you take a road trip today through rural America, you will find that the industrial sector of the economy has been hollowed out. Charles Hugh Smith writes a lot about this. In exchange for this hollowing out, the elites in the country grew rich by the financialization of the economy. This resulted in the inequality that the progressives talk so much about. The truth is that this was bipartisan in that both Republican and Democratic parties long ago sold out to the elites and corporations.

There were voices that warned the country of the eventual results of such bad deals. Who could forget Ross Perot waxing on about that giant sucking sound. One of my personal favorites was Pat Buchanan who mounted a protest campaign against George Bush I, or King George, as he called him. One wonders how things would be different today if the country had listened.

I wonder if it is not too late to wind the clock back on what has been already occurred in the past three decades. Perhaps President Trump is playing three dimensional chess after all and he will in fact make America great again. Perhaps the tariffs are a method of arriving at a more fair trade deal sometime in the future.

One thing they need to get straight is who pays the tariff. There has been some confusion amount the President and his economic advisors with some insinuation that China is paying for the tariff. That is completely false. Like any sales tax, the consumer pays the tax irregardless of who collects it. Now I would be more than willing to go back to the America where the only tax was the tariff but that it is not likely. In addition to the new tariff tax, we have to pay the income tax, the federal gas tax, the social security and medicare payroll taxes and countless others. There is no end to the plunder of the American citizen.



