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some portion of this I hear and I when I
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asked in these four group chats I got
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he's throwing stuff at the wall the
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Border he's trolling the 10-year note
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and he doesn't care about stocks and
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then I got on Shoring and Manufacturing
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as a possibility we going to make it
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more expensive to bring things in so why
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don't you consider making stuff here do
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you think that third possibility is
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what's going on here just David freeberg
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pick one of these three choices or
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another what's going on here with Tas
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specifically I don't sit inside of
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Trump's head and I don't have any direct
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line of communication to folks that are
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constructing the theory and the policy
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if I were to say what's the most
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masterful plan in an optimistic way of
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what could be going on here what's the
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master plan I would kind of craft it as
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follows tariffs aren't being done in
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isolation they're being done along with
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a coordinated policy effort to reduce
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income taxes and another policy effort
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to reduce government spending so those
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are three actions three legs on a stool
00:01:03
so tariffs reduced income taxes reduced
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government spending and they are related
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to each other they're related to each
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other because if we increase tariffs one
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element of that is that to import
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products is more expensive for example I
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buy LED lights in my
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greenhouse and the price of the LED
00:01:23
lights just went up by 25% this week I
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actually spoke with the CEO of an LED
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company and I was like why don't you
00:01:29
guys make the LEDs here here and there
00:01:31
starts to become a crossover point where
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it actually makes economic sense for the
00:01:35
company to make the LEDs here instead of
00:01:37
sourcing them from Asia and there's a
00:01:40
100,000 examples of this when the
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industrial supply chain goes to the
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lowest part of
00:01:45
production it's going to end up
00:01:47
offshoring when there's no tariffs and
00:01:49
if there are tariffs then you start to
00:01:51
do production here so you're increasing
00:01:53
both kind of security for the US supply
00:01:56
chain but also increasing demand and
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creation of
00:02:01
Workforce Now I think that the income
00:02:03
tax piece is critical here because in
00:02:06
order to make the capital available to
00:02:08
build that industry here we need to have
00:02:10
unleash capital and reducing of income
00:02:12
taxes the economic theory would be that
00:02:15
Capital will now flow into these
00:02:17
entrepreneurial activity these
00:02:18
opportunities that have emerged where
00:02:20
suddenly it makes sense for me to make
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textiles to make metals to make
00:02:24
materials to make cars to make all this
00:02:26
stuff here in the United States that I
00:02:27
otherwise wouldn't be making so both the
00:02:28
corporate and the personal income tax by
00:02:30
reducing it unleashes capital that
00:02:32
instead of going into the government it
00:02:33
now goes into the private sector into
00:02:35
building businesses okay I think that
00:02:37
there's another theory about this which
00:02:39
is as you drop the income
00:02:41
tax one of the kind of key theories that
00:02:43
I've heard spoken about a lot lately and
00:02:45
I think we're going to hear about it a
00:02:46
lot more this year is trying to get the
00:02:48
United States to move away from an
00:02:50
income taxation model to a consumption
00:02:52
taxation model so effectively what the
00:02:54
tariffs do is there's a tax for you
00:02:56
buying certain things so now instead of
00:02:58
getting taxed when you earn money as an
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individual you get taxed when you spend
00:03:03
money and some people think that that's
00:03:05
both a more fair system and a more kind
00:03:08
of economically vibrant system because
00:03:09
that will drive investment in the things
00:03:12
that people want to to produce because
00:03:14
the money's going into production do you
00:03:16
think that freeberg I'm curious I I
00:03:18
don't know it's a really interesting
00:03:19
economic theory I mean I am not opposed
00:03:22
to seeing some sort of an experiment
00:03:24
play out where we look at a shift from
00:03:27
income taxation to consumption Taxation
00:03:29
and see if it actually does have an
00:03:31
effect on economic growth and
00:03:32
productivity it has not been done in 150
00:03:34
years there's a lot of economic
00:03:36
theorists on both sides of the equations
00:03:38
saying this does work or it doesn't work
00:03:40
okay and let me just say one last thing
00:03:42
by reducing government spending we are
00:03:44
moving workers from the government into
00:03:48
the private Workforce so as those new
00:03:50
Industries pop up as those Investments
00:03:51
start to get made in building new
00:03:53
industry on Shore where are the workers
00:03:55
going to come from remember the
00:03:56
government's 30% of the US GDP today so
00:03:59
if that's not a great way to invest
00:04:01
money maybe the Private Industry is
00:04:02
better at investing money in employing
00:04:04
people that will unleash the workforce
00:04:06
and it will counterbalance the inflation
00:04:08
that we're experiencing so there's a lot
00:04:10
of inflation because of tariffs and by
00:04:12
reducing government spending that's the
00:04:13
offset to inflation so those three
00:04:15
actions I think are three legs of a
00:04:16
stool and they actually are all
00:04:18
interrelated to one another so that
00:04:20
would be my grandmas theory of what
00:04:21
might be going on
