In the realm of local and national economics, Henry George’s wisdom resonates: self-inflicted harm surpasses external threats. Denver’s Mayor Mike Johnston recently attempted a 20% service charge on restaurant bills with the idea that the extra cost could supposedly benefit business. However, this plan may cost the city dearly, leading to a potential GDP decline of $718 million and a loss of nearly 4,575 jobs by 2030. This approach, particularly alarming given Denver’s restaurant struggles, is deemed a misguided strategy for revitalising local commerce.
Shifting focus to tariffs, Milton Friedman shed light on a crucial truth: the ultimate burden of taxes falls on individuals, not corporations—”Corporate officials may sign the check, but the money comes from the corporation’s employees, customers or stockholders.” President Trump’s tariffs, ranging from 20% on Chinese imports to 25% on goods from Canada and Mexico, exemplify this zero-sum view of trade, where one gain necessitates another’s loss, ignoring the cooperative spirit that underpins trade itself. In reality, trade should foster mutual benefit, not governmental interference.
The impact of import taxes is not distant; it resonates deeply within Colorado, which imported $17 billion last year. Tariffs threatened by Trump could inflict $1.4 billion in added costs annually, particularly harming sectors such as restaurants and breweries. For instance, steel and aluminum tariffs could impose a hefty $35 million burden on importers, causing ripple effects that lead not just to consumer price hikes, but significant job losses in industries reliant on these materials.
Furthermore, retaliatory tariffs complicate this precarious landscape; Colorado, which saw record exports, faces rising costs because of tariffs on corn and other goods intended for international markets. These fluctuations create uncertainty, leaving businesses unable to strategise effectively. Trump’s previously lauded US-Mexico-Canada Agreement (USMCA) now appears compromised, as justifications for tariffs shift frequently.
While calls to increase American manufacturing or curb illegal activities like fentanyl trafficking are rooted in valid concerns, no singular trade deal can encapsulate all objectives. The resulting economic strain primarily impacts those who struggle to afford basic needs. This chaotic policy landscape necessitates focus—fostering clear, consistent trade practices that allow for economic prosperity without artificial inflation driven by misguided agendas. Ultimately, the repeated cycle of economic fallacies, whether from Trump or Johnston, burdens society while masquerading as benevolence; it’s time to halt the meddling and let consumers thrive without undue costs.
Jimmy Sengenberger critiques economic policies from local to national levels, emphasising the potential harm of Denver’s proposed restaurant surcharge and Trump’s tariffs. He notes that burdening taxpayers can lead to job losses and increased costs, particularly for struggling communities. Clear and consistent policies are vital for economic stability, avoiding the pitfalls of fallacious thinking which mask destructive impacts as benevolence.
The exploration of economic policies reveals a stark truth: misguided approaches, whether through local surcharges or national tariffs, threaten to undermine prosperity for all. Clear, consistent policies that focus on mutual benefits in trade and local economies are essential. Recognising and avoiding the fallacies that lead to self-inflicted harm can pave the way for more effective governance that truly supports citizens rather than inflating their challenges.
Original Source: gazette.com
