What do tariffs do to our economy? Let us try to explain the chain of events that will surely follow if the tariffs stay in place. The first major impact will be double digit inflation. You will be buying less because your purchasing power will be lower…your paycheck won’t buy as much as time goes on. Because you, the consumer, can’t afford to buy as much, inventories of manufactured products (cars, appliances, homes, some food items, etc.) will start to fill warehouses. Manufacturers will see that their products are not selling as fast so they will cut production–maybe lay off a third shift or maybe declare a temporary shutdown until inventories are reduced. This will cause unemployment to rise dramatically. Those unemployed will be attempting to support themselves and their families in a double digit inflation environment. The unrest will grow into a public roar and demonstrations will follow. If tariffs are still in place we can expect an increase in criminal activity as people steal to survive. We are describing a brutal economic scene where everyone becomes desperate. Only the super rich will be insulated. And they may actually be helped because only they will have the funds to weather the inflation and buy up assets that others sell to buy food. Yes, this is America. But victims of the 1930’s Great Depression know what this kind of desperation breeds. The 1929 Stock Market crash resulted from margin account (loans to buy stock) being called and a panic selling spree. The greed of the wealthy investors caused that 10 year misery (the 1930’s). But the scene we’re describing is caused by one man who wanted to exert power. He will put more people out of work than the Great Depression. Historically, this may be the Greater Depression. And the irony is: some people are supporting his tariff actions because they actually believe he will increase manufacturing employment. Time to wake up, America. This cycle needs to be dismantled.
Comments are closed