Tariffs to Pay Down the Debt?

John Reid
Tuesday, August 7th

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

A little money. I'm it's a little it's more than just embarrassing to be a Republican. As I am and to talk all the time about. Cutting spending in the federal government and they don't look at where we are a there's a lot of success going on out there but. It got to get this. This financial situation under control with the federal government Jerry walls act as a senior policy analyst with the Tax Foundation. And Jerry were glad to have you on because the president caught a lot of people. Off guard when he actually tweeted that the tariff revenue from the the tariffs that he has imposed or increased. Will help pay down the national debt. Is there a mathematical equation weird. Where is that true and that did that the revenue from the terrace. Would actually make a dent in the national Denham I'm curious as to your analysis. What can we reduce morning yeah and I think that caught a lot of people go by surprise that doesn't make sense for a couple of reasons one the amount of revenue is certainly it's. Not insignificant. The amount of revenue that being raised. But it also doesn't come close to up really putting a serious dent in a 21 trillion dollar. National debt but secondly he frames that are the weight you paid on the debt. Without taxing the American people and I think it will kind of realizes that's not true the terror are intact attacks on the American consumer. So most of the money would it. If hypothetically even if it did make a dent in most of that money would come from American wallets not overseas wallets. He would actually come from American re character essentially import taxes yeah ordering the foreign companies that they are still there impacted. But they're being paid by American if you can afford to consume less and are paying more for what they are consuming. So given that I I'm I kept thinking maybe I'm misunderstanding this but it sounds like you're validating what my basic understanding of the situation was. Where do you think this came from. As just a talking point to get people to talk which I'm convinced may be part of the strategy for the White House's. Let's throw some things out there will get people talking about these issues that they would normally ignore because they're too complicated for anybody to spend any time off. You know it's not this administration has operated on a different frameworks from one parent from the beginning certainly the president gives the fans that he believes. That terror can themselves be good at portrayed and good for the economy not just that they short term negotiating tactic. But then end goal in another itself I don't think that's something that would find much support to. The end of the economic community or generally in the broader political community because again its attacks on American consumers it's a girl I'm raising caught its rating cut by the way of manufacturing production cheer as well yes the idea presumably is to help promote American industry but for every job. Manufacturing Fay overall steel how many job do you have that are using steel I think product as a as a raw material in manufacturing infielders got a whole lot more expensive and then you multiply this by. Intensely 500 billion dollars worth the beard the territory imposed on you do a lot of damage the American economy that way. Our let me. Play devil's advocate here do you think maybe the president's mindset is that we have to shift away from. Importing even elements of the products that we produce here and let's just have our own little ecosystem. With the ball all over it decision and it's a nation of 322 million people if we buy and sell and produce our rom products. And just exclude the rest of the world that this is a pretty vibrant economy. And we think that's the direction he's trying to send us an I worked at the US chamber of commerce I know those guys are not on board for this but. What do you think that that he is the mindset of of the president himself and maybe some of the people in these surrounded himself went. Possibly but it's the very dated mind that it's a mindset there really hasn't been around much for several centuries believe there's been the recognition that. Yeah we have this opportunity to trade with the entire rule that you have comparative advantages. The United States is eight yup highly developed as a society we have high technology we have highly productive workers. There are things we should be spending our time on. That maybe don't make it much sense to produce here maybe some don't like piece here that become kind of we can be so much more prosperous by producing the the higher order goods the end of purchasing other things from overseas and we are better off the rest of the world was better off. I mean we could take that same logic down to the local level you could have people in chesterfield county not trade Alpharetta chesterfield county. And they would clearly be worse off for the deal because there are things that are more affordable outside and both producers and the consumers and Jeff Jacoby worse. Really I'm innocent just ended and should bring it down to that local level that makes good sense why spend. The money and the time in the effort to produce a T shirt here when you know it's gonna cost you twelve dollars. When it would cost you a dollar 25. And spewed still make money if you imported it from. You know. And that's an interest thing. Reality check for a lot of the folks who were saying this trumpets currently adding. One point six trillion dollars to the debt over the next ten years. So let's meal let's take it away from this just the tariffs conversation. Do you think there is any way to throttle that or to just pull on the reins and and and try to. Bring this under control or we have we opened the floodgates with his last budget bill. I fear we have opened the floodgates. I mean what I think captured formal Wear the great thing and overdue. It doesn't have a cost over ten years at one point five trillion dollars responsible way to do this would be to keep spending in check but what we've seen from the administration and from congress is not just the administration. It's too dramatically increased spending in most sectors though there's not really that fiscal constraint that you'd like to see. Yeah I'm curious as to boom we aryan October and the heat of the reelection campaigns all across the country for congress whether this will even be. Part of the conversation I'm getting the impression that it's not going to be. Through its interest in the C Jerryd walls I senior policy analyst for the Tax Foundation appreciate you joining us this morning thanks. And it.