Saturday, July 26, 2025
Trump announced his “deal” with Japan. Paul Krugman commented on it in two different posts. He pointed out that Trump proudly announced that Japan is contributing $400 billion to the U.S. economy. Not realizing that this is a direct increase in the National Debt. He has put a 15% tariff on Japanese goods, which is much higher than under Biden at 1.9%. This means that eventually we will have to pay more. Currently companies are selling off their inventory or absorbing the costs, but this won’t last.
If that isn’t stupid enough there is a 25% tariff on Mexico and Canada for cars and steel, which means American built cars that use parts from Canada and Mexico will have to pay more than the same stuff from Japan. Art of deal!
And the stupidity keeps coming! Mike Johnson, parroting Trump, wants the Fed to lower interest rates, “because the economy is hot.” Did all these people fail Econ 101? Well, Trump may have signed up for such a class, but we know he didn’t attend many classes and had his older sister do his homework. He has demonstrated a remarkable ignorance about how economies, and the world in general, work.
Interest rates are used to tame economies when they get too hot (ie inflationary) by raising rates, and to goose an economy when things are dragging by raising rates. This is just the opposite of what Trump says he wants.
To reinforce these concepts: Guess how you make the economy improve if things are slow Mike? Guess. Come on. Why you lower interest rates. See if you lower rates then more people and companies will borrow money to do things and the economy will grow. So if you were to lower rates when the economy was hot then guess what? Prices would increase because more money was available. That, Mike, is called inflation. So then what happens. Why the price of everything goes up; the value of the dollar goes down and we have an economic crisis because prices have sky rocketed. Oh well. Who cares about facts? Or simple accounting? I mean when Japan puts money into the U.S. economy that is a direct increase in the national debt. It’s not a plot or leftist something or other. It’s called accounting. If a foreign power puts money into the U.S. that is a direct increase in U.S. debt.
No one has done more to increase the national debt than Donald Trump.
Gavin Newsome recently pointed out a fact. A fact? Weird, yeah I know. Did you know that 52 million jobs were created since The Cold War. Fifty million during Democratic administrations and 1.9 million during Republican administrations? So, if you like recessions and the economy going in the dumper vote Republican.
Was Japan clued in on this? Magic 8 ball says ‘Unlikely’