Tariffs Will Increase US Debt - Econ Lessons

[TexasTowelie]

Hi, my name is Mark. I am an Economist. Did you know tariffs actually increase the national debt instead of reducing it? While they may generate short-term government revenue, tariffs raise prices, facilitate economic growth, and dry up tax revenue, ultimately leading to higher deficits. The current administration has expanded the debt and will continue to do so by implementing protectionist policies that slow GDP growth.

Tariffs function as a regressive consumption tax, disproportionately hurting low-income households who spend a larger share of their income on goods. Meanwhile, programs like the Earned Income Tax Credit (EITC) act as a fairer form of assistance, similar to a negative income tax. By prioritizing tariffs, the administration is not only making the tax system more unjust but also weakening the U.S. economy and driving up the national debt.

We’ll explore why tariffs don’t work as a debt solution, how they distort the economy, and why a more thoughtful approach is needed for sustainable growth.