Garys Economics The week Trump nearly crashed the world economy
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Apr 13, 2025 Chaos reigns as tariffs reshape global trade dynamics. The conversation dives into the unintended consequences of these policies, particularly on low-income populations. Political decisions send financial markets into a tailspin, illustrating the unpredictable nature of economics. Amid rising inflation and government debt, traders navigate a precarious landscape fueled by social media. The podcast emphasizes the need for calm amidst economic turmoil while urging a more informed public discourse on these critical issues.
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Trade Deficits and Wealth Flow
- The US trade deficit with countries like China results in a flow of wealth out of the US.
- This is similar to how wealth flows from the working and middle classes to the super-rich.
Tariffs as Regressive Tax
- Trump's plan to use tariffs to reduce income tax sounds appealing.
- However, tariffs function as a regressive tax, disproportionately affecting the poor.
Regressive vs. Progressive Taxation
- Regressive taxes, like tariffs, disproportionately burden the poor.
- Unlike progressive taxes (e.g., income tax), regressive taxes place a higher burden on lower incomes.