Income up 8 times inflation

Monday's originally scheduled post

This post was delayed from Monday on account of rain—the raining of bunker busters.

The Bureau of Economic Analysis reported that personal income increased 0.8 percent in April. Inflation rose 0.1 percent. That’s a net gain of more than 500 bucks. A year’s worth of April 2025s is worth $6,000 as inflation would fall to that 1.4% rate Trump bequeathed to the auto pen of FJB on January 20, 2021.

It is too early to declare victory for Trumponomics, but America seems to be rid of the covid era and is back in business. Tariffs and ICE are doing the trick.

The Wall Street Journal reported, “The U.S. trade deficit collapsed in April, as tariffs took a huge bite out of imports.

“The trade deficit narrowed to a seasonally adjusted $61.6 billion in April, the Commerce Department reported on Thursday, its lowest level since September 2023. That was down sharply from the record $138.3 billion it hit in March, when businesses were racing to bring in imports before the Liberation Day tariffs that President Trump imposed April 2.”

Losing that much in sales has countries begging for tariff relief.

This shocked CNN, which asked on Friday, “So, has anything actually gotten more expensive because of Trump’s tariffs?”

CNN said, “America’s effective tariff rate is now 14.1%, according to Fitch Ratings, up from 2.3% last year. That means Trump raised taxes on imported goods by nearly 12 percentage points in 2025. Economists expected substantial inflation increases as a result.”

So he raised tariffs nearly six-fold without an instant collapse of the economy. Predictions from economists are worse than TV weathermen.

CNN also said, “Goldman Sachs analysts last month said core goods inflation could hit 6.3% this year and consumer prices would surge 3.7% by early 2026. JPMorgan economists said core inflation would nearly double by the end of this year. And American consumers in May expected prices to rise an alarming 6.6% this year, according to sentiment surveys from the University of Michigan. That prediction fell in June, but consumers still expect inflation to hit 5.1% in 2025.”

Those are rookie numbers. Inflation hit 9.1% in June 2022 and was 8% for the year under the auto pen of Biden.

But don’t spike the ball because Federal Reserve Chairman Jerome Powell said, “Goods being sold at retailers today may have been imported several months ago, before tariffs were imposed.”

Tariffs are not automatically passed along to consumers because countries want to maintain market share. Americans buy their stuff because it is cheap. Tariffs make imports not as cheap but if you are making 50% profits, you can eat a 10% tariff and still post 40% profits.

The Tax Foundation said, “Estimating the revenue raised by tariffs is not as straightforward as multiplying the amount of imports by the applicable tariff rate. Direct tariff revenue is lowered by behavioral, offset, and dynamic economic effects.”

If you buy American, you don’t pay the tariff. The trouble is, many products no longer are made in the USA. TVs are my favorite example.

Protective tariffs not only encourage American industry but raise federal revenues.

The Tax Foundation estimates “a 10% universal tariff would raise $2.2 trillion over the 2025 through 2034 budget window on a conventional basis (0.6 percent of GDP), a 15% universal tariff would raise $2.9 trillion (0.8 percent of GDP), and a 20% universal tariff would raise $3.4 trillion (0.9 percent of GDP).”

Notice the doubling of tariffs does not double revenues. Once again, Arthur Laffer’s curve proves true.

That $2.2 trillion figure is interesting. Rand Paul and other Democrats decry tariffs as a tax.

At the same time Senator Paul and his buddies oppose the Big Beautiful Bill, which includes making the 2017 tax cut permanent. This would impose an actual, factual tax on Americans and corporations of $4.3 trillion over the next 10 years.

This makes about as much sense as demanding Hegseth reject a gift of a $400 million airplane while bitching about celebrating the 250th anniversary of the Army because if supposedly cost $43 million. No wonder our national debt is nearly a million times larger than $43 million. These mopes don’t know math.

Tariffs are only one step in Trumponomics. ICE is doing its work to deport everyone. Already a million illegals have self-deported.

Treasury Secretary Scott Bessent told Miranda Devine (she broke the Biden laptop story), “12 or 20 million illegal aliens coming out of the workforce” creates massive wage pressure upward.

Karl Mehta, a Senior Advisor at America's Frontier Fund, tweeted, Alexander “Hamilton's original tariff strategy had two purposes:

• Finance the Treasury

• Protect nascent industries

“Trump added the third leg: negotiation leverage. This is economic warfare disguised as trade policy. And it’s working.”

Trump used tariffs and fought illegal immigration last time. He has added a third dimension to Trumponomics, DOGE.

Elon Musk doesn’t waste his time on petty things. He builds cars that drive themselves, satellites that link the world and rockets to take man to Mars. That he would spend four months drilling through federal spending on top of that is just amazing.

Squeezing the waste, fraud and corruption out of one-third of our economy are just for openers. Trump is also pulling the plug on overzealous and ignorant regulators who manage every facet of our lives.

Abortion advocates tell us they want government out of our bedrooms. How about we kick it out of our bathrooms first? Let toilets flush all the water you want, and increase shower power too. Why is it the government’s business to save water or for that matter, save energy?

Less regulators, less regulations. Why are we hobbling industry by imposing ridiculous rules that even the communists in Red China won’t do? Stop publishing the Federal Register for a year and watch the economy grow.

Economic freedom is freedom. Anything less is slavery.

One month does not mean much. Even one year does not. But Trump is off to a great start in bringing us the Golden Age.