Vincent Smith of the American Enterprise Institute takes the Trump administration to task for its recent decision to pay farmers affected by new tariffs.
How silly is this? Impose tariffs on steel and aluminum imports from around the world that anyone with a lick of insight knows are sure to be countervailed by steel and aluminum exporting countries through tariffs on U.S. major exports like agricultural commodities. Then give subsidies only to one relatively small privileged group of businesses being damaged by the policy you dreamt up, in this case a small section of the rural population, because you hope they may vote for your party in November.
In fact, use these tariffs as an excuse to double the crop insurance and price subsidies already being doled out to many of the same financially secure farm businesses who will receive the new subsidies. …
… Moreover, you can increase the federal budget deficit, although this time by only about $13 billion. Of course, happy thought for the day, as any trained economist knows, increasing the federal budget deficit will eventually only make the balance of trade deficit worse. So what is next? You can impose more tariffs to cure the increased trade deficit, which will be further countervailed by other countries, which will justify more subsidies for farm businesses. That way you can extend our new American farm subsidy and deficit spending program for several years.
