Charles' favorite economist: Trump tariffs cost $300k per family

Larry Summers weighs in on Trump's tariff policy

Im sure Charles will agree.  This is his favorite economist he pointed to about 100 times during the Biden administration.

“Never before has an hour of Presidential rhetoric cost so many people so much. Markets continue to move after my previous tweet. The best estimate of the loss from tariff policy is now is (sic) closer to $30 trillion or $300,000 per family of four,” he wrote in a post on X.

       Another DemocRat saying what you would expect.  

PJ, will you report when the market bounces back?  Nope.

I'm a little confused by this.  The artical PJ links to states "The economist said an hour of rhetoric has likely never caused so much economic damage, and that families would take a hit of $300,000 per year."  He then goes on to reference stock market losses as a basis for this bizarre estimate.  So is Larry Summers predicting that this market decline will happen every year as long as there are tariffs?  How can the 'the loss from tariff policy be closer to $30 trillion' when the ENTIRE US GDP is below $30 trillion?  It makes no sense.

The average American family has a median of $15,000 invested in the stock market, with the wealthiest 10% holding 93% of all stocks, while the bottom 50% hold only 1%...If stocks were completely wiped out to 0, how can you subtract $300,000 annually from a $15,000 average investment?  It makes no sense.  it's a globalist scare tactic.

If PJ actually believes this number, then please show us your calculation on how the average American family could possibly take a $300,000 annual hit based on short run stock market losses and how real losses from tariff policy will approach anything close to $30 trillion dollars.

Why can't I  believe that an economist can be right like Summers was right about reckless deficit spending causing Bidenflation and also believe that he's wrong about the long term impact of Trump's economic policies?  It's like he said 'The Sky is Blue' and then 'The Earth is Flat'.  Why do I have to believe both?

Summers doesn't consider the offsetting impacts of deregulation, cutting government spending by reducting waste and fraud and energy policies that promote lower energy prices.  Nor does he consider production shifts and several tillion dollors of new investment in the US.  Nor does he look at the impact of tax reductions for the working class. And finally, he doesn't consider that the tariffs could mostly lead to better trade deals like the 0 tariffs Viet Namn and Argentina are now offerring.  If you hate tariffs, you ought to love those negotiations.  

And finally, the stock market was way overpriced compared to earnings anyway.  it was overdue for a correction.  This tariff panic simply hastened the correction.  If you don't believe me, look at a Shiller CAPE chart (the one Buffet used to move out of the market 6 months ago).   You'll see that the ratio of stock prices to 10 year inflation adusted earnings was incredibly far above average....like it has been in most every major downturn in stock market history.

Hey Charles, since you're in the mood to answer questions, and you seem to consider yourself an expert economist, I have a question for you. You said Biden's reckless spending caused inflation, citing the Infrastructure Act and Inflation Reduction Act as 2 of three "exact legislation" that caused it. All I have is a simple timeline to dispute that. So I'll ask again how that legislation caused inflation when inflation went down as the money began to flow into the economy? Thanks!

He's the original thread to remind you:

MaxFlavor

Feb 22, 2025
12:40pm

Block User

Originally posted by: CharlesII

Oh little things like adding 8.3 trillion to the national debt.  This + the Fed's easy money policy was the root casue of our 40 year record inflation and decline in real wages.. That's kind of the definition of reckless spending.

Exactly Legislation like:

American Rescue Plan 1.9 trillion.

Infrastrucure and Jobs Act 1.2 trillion.

So called Inflation Reduction Act.1.2 trillion.

American Rescue Plan helped increase the inflation rate higher than it would have been without the bill, the Cares  Act was also a factor.

The inflation rate was 6.8% in November of 2021 when the Infrastructure Act was passed, it was at 2.9% in December 2024. I don't think building infrastructure is reckless, Trump sure talked a lot about it during his first term with the usual MAGA results, none.

By November of 2023, 80% of the funds were still left to be awarded. 

Brooking Institue:

"Formula and direct federal spending continue to move at a steady pace, already pumping $306 billion into state coffers and direct investment projects. And like an athlete who grows into a game, competitive grantmaking is steadily increasing, with 80% of all competitive funding still left to be awarded. Just as importantly, the Biden administration has shown no flagrant political bias in splitting awards among states—certainly welcome news to the bipartisan legislators who authored the bill."

The inflation rate was 8.3% in August of 2022 when the Inflation Reduction Act was passed, it was at 2.9% in December of 2024.

As the "reckless spending" began to work it's way into the economy the inflation rate fell, your hypothesis doesn't hold up very well to a simple timeline.

Charles, youa re asking me to explain Larry Summers?  He's your guy.

Im just linking to what your guy said.

If you think your guy is credible when he critiques one president....but then not credible when he critiques another then that really just speaks your credibility.

Have an incredible day.

How do you know that Summers didn't consider any of that? 

Somehow, I don't think that North Vietnam and Argentina can rescue us from the abyss. And it's only a matter of weeks before they say something that pisses Trump off anyway.

Scott Bessent says up to 70 nations want to negotiate over Trump's tariffs -- https://www.foxbusiness.com/economy/scott-bessent-says-up-70-nations-want-negotiate-over-trumps-tariffs