Originally posted by: Brent Kline
If there are less consumers, then prices start falling. Lower housing costs .Lower costs of everthing. Not sure the effects on the stock market, I guess we will see. It is not really clear what solutions people have, other than don;t let Trump touch anything. I hate all the bitching with not one new idea.
There is economic history that tells us what happens when blanket tariffs are enacted. It isn't a new idea. It is an old idea that has been tried numerous times by different countries including ours and they make economic conditions worse not better.
You might think Trump can buck economics and history. I think he knows squat about either and thinks his seat of the pants view of how things should work, no matter how stupid, are all he can see.
The tariffs make it impossible for the market to self-correct. In your example prices do go down when people quit spending, the problem is the tariffs. You have someone, Trump, constantly jacking up prices when they should be falling as consumption does. With the tariffs you never get to that point where consumers collectively utter a sigh of relief and say you know things don't look so bad right now as prices are low, so I should start consuming again.
Futhermore, your tariffs have destroyed the market. Countries that used to buy a lot of our stuff no longer buy it because of the retaliatory tarrifs. It doesn't matter if somebody comes in behind Trump and gets rid of the tarrifs. The market has moved on and buyers have built relationships with new sellers.
They don't come back to us when we say we were just kidding about those tarrifs for the last four years. The Trump economic hole is going to be so big it is going to take 20 to 30 years to get us back to where we were before.