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some portion of this I hear and I when I asked in these four group chats I got he's throwing stuff at the wall the
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Border he's trolling the 10-year note and he doesn't care about stocks and then I got on Shoring and Manufacturing
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as a possibility we going to make it more expensive to bring things in so why don't you consider making stuff here do
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you think that third possibility is what's going on here just David freeberg pick one of these three choices or
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another what's going on here with Tas specifically I don't sit inside of Trump's head and I don't have any direct
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line of communication to folks that are constructing the theory and the policy if I were to say what's the most
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masterful plan in an optimistic way of what could be going on here what's the master plan I would kind of craft it as
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follows tariffs aren't being done in isolation they're being done along with a coordinated policy effort to reduce
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income taxes and another policy effort to reduce government spending so those are three actions three legs on a stool
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so tariffs reduced income taxes reduced government spending and they are related
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to each other they're related to each other because if we increase tariffs one element of that is that to import
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products is more expensive for example I buy LED lights in my greenhouse and the price of the LED
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lights just went up by 25% this week I actually spoke with the CEO of an LED company and I was like why don't you
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guys make the LEDs here here and there starts to become a crossover point where it actually makes economic sense for the
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company to make the LEDs here instead of sourcing them from Asia and there's a 100,000 examples of this when the
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industrial supply chain goes to the lowest part of production it's going to end up
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offshoring when there's no tariffs and if there are tariffs then you start to do production here so you're increasing
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both kind of security for the US supply chain but also increasing demand and creation of
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Workforce Now I think that the income tax piece is critical here because in order to make the capital available to
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build that industry here we need to have unleash capital and reducing of income taxes the economic theory would be that
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Capital will now flow into these entrepreneurial activity these opportunities that have emerged where
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suddenly it makes sense for me to make textiles to make metals to make materials to make cars to make all this
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stuff here in the United States that I otherwise wouldn't be making so both the corporate and the personal income tax by
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reducing it unleashes capital that instead of going into the government it now goes into the private sector into
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building businesses okay I think that there's another theory about this which is as you drop the income
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tax one of the kind of key theories that I've heard spoken about a lot lately and
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I think we're going to hear about it a lot more this year is trying to get the United States to move away from an
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income taxation model to a consumption taxation model so effectively what the tariffs do is there's a tax for you
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buying certain things so now instead of getting taxed when you earn money as an individual you get taxed when you spend
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money and some people think that that's both a more fair system and a more kind of economically vibrant system because
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that will drive investment in the things that people want to to produce because the money's going into production do you
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think that freeberg I'm curious I I don't know it's a really interesting economic theory I mean I am not opposed
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to seeing some sort of an experiment play out where we look at a shift from income taxation to consumption Taxation
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and see if it actually does have an effect on economic growth and productivity it has not been done in 150
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years there's a lot of economic theorists on both sides of the equations saying this does work or it doesn't work
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okay and let me just say one last thing by reducing government spending we are moving workers from the government into
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the private Workforce so as those new Industries pop up as those Investments start to get made in building new
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industry on Shore where are the workers going to come from remember the government's 30% of the US GDP today so
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if that's not a great way to invest money maybe the Private Industry is better at investing money in employing
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people that will unleash the workforce and it will counterbalance the inflation that we're experiencing so there's a lot
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of inflation because of tariffs and by reducing government spending that's the offset to inflation so those three
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actions I think are three legs of a stool and they actually are all interrelated to one another so that
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would be my grandmas theory of what might be going on