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Post #2128: One hundred pounds and done: The end of my weight loss.

 

I weighed 185 this morning.

For the first time since high school, I’m not overweight.  I have reached normal weight, based on my body mass index (BMI).   No drugs involved, just diet and exercise.

Even as recently as last year, I thought this was an impossible goal.  I was more-than-satisfied with the results when I finally made it to “overweight”, rather than “obese”.

But “normal”?  Not in my wildest dreams.

And now that I’ve made it, it’s kind of an anticlimax, really.  As I explain below.

Let’s just get all the standard successful-weight-loss stuff out of the way.

Based on what I see on the internet, I have to start this post by crowing about my weight loss in as many ways as possible.  Show some pictures of me holding up some now-comically-large clothing.  Maybe some side-by-sides of obese-me versus normal-me.

Skip that.

I’ve lost 100 pounds, from 285 to 185.  I’ve lost a foot off my waist, from 46″ to 34″.  I don’t think I need to belabor it.

This resulted in all the changes you might expect, and then some.

I’ve lost enough weight that I’ve had to adjust not just my clothing size, but a bunch of other things, as detailed in my prior posts on weight loss.  Shoes.  Eyeglasses.  Bed.  Patio furniture.  I hit another one just yesterday:  I’ve lost so much weight, I’ve had to reset the suspension on my bike.  I thought the air shock suspension on the bike had gone flat.  To the contrary, it’s just way too stiff, having been set for a guy who weighed 100 pounds more than me.

Turns out, there’s a lot of stuff in your life that conforms to how fat you are, and it takes quite a while to find it all, once you’ve lost the fat.

Surprisingly not difficult

I’m also supposed to belabor the struggle, how difficult things got as I got thinner, and on and on.  Those awful weight plateaus, and the effort it took to break through them.  As if it took some sort of super-human willpower to get through this.

But that just didn’t happen.   As you can see above, the weight came off almost like clockwork.  Even now, I’m pretty sure I could just continue losing weight until I starved myself to death.  The point being that nothing about my body’s reaction to weight loss did anything to stop further weight loss.

That’s not to say that this was costless or effortless.  I have, in fact, changed more-or-less everything about what and how I eat.  Put up with some hunger.  Had some bad days.  And so on.

But the facts are that:

  • I proceeded slowly.  I didn’t try to jump into some all-new lifestyle.
  • I changed my diet initially merely by addressing my worst bad habits, starting with alcoholism, and working down from there.
  • I monitored the results and adjusted as necessary.
  • As my diet changed, my cravings faded, and my sense of hunger faded.
  • And, eventually, I settled on:
    • a modest 500-calorie-per-day deficit,
    • eating nothing but small meals and snacks throughout the day,
    • eating no (or nearly no) starch, “empty calories”, junk food, fast food, or takeout food.

The fact is, although I started off merely trying to achieve sobriety, I ended up with an almost-completely-conventional weight loss program.

In the end, I aimed for very slow weight loss (5 pounds a month).  The theory is that this prevents your body from over-reacting to the calorie restrictions.  And, near as I can tell, that worked.

I eat a ridiculously healthful diet, but not by choice.  Turns out, if you restrict your calories, and you want to meet your RDAs for nutrients, you have no choice but to eat high-nutrient-density foods.  Just as a matter of arithmetic.  If you only have a limited number of calories, you have to eat foods with a lot of nutrition per calorie.  Fruit, vegetables, fish, lean meat, cheese, nuts.

I’ve had to resort to whey protein powder as a protein source.  Otherwise, to meet a dietary protein standard (1 gram per kilogram body weight, per day), I’d have ended up eating nothing but meat, all day long.  Whey protein gives you high-quality protein for the fewest possible calories.

Otherwise, I eat what I want.  For example, I put high-fat blue cheese dressing on my salads.  Why?  Because I like it.  Every piece of diet advice says to use vinegar or some other no-cal salad dressing.  But without the fat, my body simply does not register salad greens as food.  So I eat high-fat salads.   So sue me.

Under my weight loss plan, any food is fine, as long as three things happen:

  • I stay within my daily total calorie limit.
  • The food is not a high-glycemic-index food or otherwise stimulates hunger.
  • The food is not “empty calories” (except possibly in small amounts).

Separately, regular exercise, properly timed, has two direct and obvious benefits. 

  • Sure, it burns some calories.
  • But, it also temporarily kills your appetite, and takes up time that you can’t spend eating, or thinking about eating.

Every other day, my wife and I hit the gym mid-morning.  The principal advantage of mid-morning exercise is that it resets that day’s “diet clock”.  We’ll get back from the gym around lunch time, and at that point, my combined diet-and-exercise calorie total for the day is negative.  I won’t hit “break even” until about 2 PM.  And so, in effect, I get to eat a day’s worth of food, in the last eight or so hours in the day.  Plus, being able to eat a bit more, on gym days, is a great incentive to get to the gym.

Finally, the only big downside, so far, is that I have a wrinkly tummy.  (And probably ass, but I can’t see that in the mirror, so I don’t much care.)  Wrinkly enough that it looks weird.  I’ll wear a rash guard when I go swimming, and that’ll cover that.

What’s next?

Not much.  That’s what makes this such an anti-climax.

Now that my weight should be stable for a while, I’m going to buy some summer clothes.

I’ll eat maybe another 500 calories a day.

That’s about it.

Conclusion

My unshakeable conclusion is that more-or-less all the standard, mainstream diet advice — such as you might get from a physician or other medical professional — is correct.

Don’t:  Be an habitual drunk, eat junk food, eat empty starch calories, eat without limit, be sedentary, eat large amounts of sugars, starches, and other high-glycemic-index foods.

Do:  Eat high-nutrient-density foods, subject to a calorie limit, and get regular exercise.

That’s boring advice.

But sometimes boring is good.

Post 2092, revised. These were a few of my favorite things.

 

Edit:  It’s now looking like an independent Federal Reserve is soon to be toast.  Back when government elites had to follow the law, it would have been illegal to replace the Fed chair before the term is up.  But that’s history.

Looking on the bright side, this will solve our toilet paper shortage once and for all.  Give it a couple of years, and you can just reach into your wallet if you’re caught short.  That’s what the dollar will be good for, once we’ve gone full banana republic with our currency. 

The price of gold has been rising out of sight?  My guess is, you ain’t seen nothin’ yet. 

I’m moving my paper assets into anything-but-dollar-denominated-investments.  For the little people, like me, normally, foreign investment accounts would greatly increase likelihood of an IRS audit.  But now that the IRS staff has been cut, I guess I can just laugh at the IRS the way the rich do. 

In any case, better that, than staying invested in nothing but dollar-denominated assets, while control of the Fed is seized by the economic geniuses who think that huge tariffs, changing daily, are brilliant economic policy.

Thank God Trump established a U.S. cryptocurrency reserve ahead of time.  Such foresight! /s

Original post, from 2/6/2025, follows.

These are three things that I try to bring to mind, as I read the news, and the Trump Takeover unfolds.

I take it as given that the reader knows this Presidential transition is not normal.

And that breaking stuff is easy.

In order, my three main points of reality-based comfort are:

The Fed

Source:  Via Wikipedia, “By AgnosticPreachersKid – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=6282818”.

It makes a nice mantra.

I chant that, in my mind, to calm the jumpies that I get, whenever I start thinking about who now has access to what, where, within the computer system that literally makes U.S. Government payments.

Sure, they’ve let the barbarians into the Treasury, and while that opens the door to all kinds of potential mischief and avoidable security issues, I should stay focused on the dollar.  Because everything I own is denominated in those.

So, who makes (creates) the dollar anyway?  And, likewise, who runs the banking system?

The answer I come up with is the Fed. Not Treasury.

At which point I breathe a sigh of relief.  And try to fix that fact firmly in my head.  The (security of) the dollar depends on the Fed, not the Treasury.

At least for now.  I think.

This, despite the Treasury being tasked with creating the physical tokens we exchange as money, in the Bureau of Engraving and Printing.  But a) don’t confuse that with real money, and b) they do that, in effect, under license and control of the Fed, as the bills themselves are Federal Reserve Notes.  It’s why even the lowly $1 bill has a unique serial number on it.

Global warming

The science there is pretty good.  We’ve got a handle on the major trends, under a business-as-usual scenario.  No shortage of credible warnings.

Without a doubt, the pro-fossil-fuel, anti-renewable, climate-change head-in-the-sand posture of the Republican party, at this moment in time, will eventually stand out as having been spectacularly dumb.

Even if I’m an optimist on this — a position that does not come naturally to me — and assume we’ll eventually get a handle on climate change, our descendants will curse us for at least the easily-avoidable costs we now impose.

Better not to burn it.  If you can avoid it.  That’s the minimal answer to fossil fuels.

By that lowest-bar criterion, Republican global warming policy flunks.

Science ain’t going nowhere.  All this anti-science nonsense, in the long run, all of that loses. 

It may take a while.  But it’s not nice to fool Mother Nature.

Medicare?

 

I read where Musk’s Team was going to identify fraud in the Medicare program.

I’ve been around Medicare most of my professional life. FWIW.  So this was a very comfortable topic for me.

And I said, fraud in Medicare?  I’d bet you can find some. 

There always has been, always will be, fraud in Medicare.

Ideally, you’d like to keep it to minimum. As would any insurer.  Or any sane individual, for that matter.

My point being that it’s not as if this issue of fraud has passed unnoticed.

To the contrary.  I can vaguely recall the Medicare program having, effectively, competitions among contractors, to see who could flag the most fraud.  And I vaguely recall that IBM and Watson itself took on this task, at some point.  But without anything much happening.  My memory or not, there’s too much money to be made in stopping it, if nothing else.

Thus, I see a proposal to throw de-identified Medicare claims data up against the latest AI, and … see what sticks?

Not a bad idea. 

I’d be surprised if it hasn’t already been tried. Twice over.  Perhaps Musk has access to a “better” AI?  Perhaps the Medicare claims processors were behind the times?  Or perhaps not. Or maybe it doesn’t matter, or the problem remains ill-suited to AI.

In any case, fraud in Medicare claims.  Been there.  Done that.

I’d bet they’re going to find some.

But no more than anybody else.

But if so, that would be reassuringly normal.  Everybody takes a hack at fraud in Medicare.  To the point where I’m pretty sure there ain’t no low-hanging fruit.  Or not much.

But I recall that Medicare got stung badly, recently, by a novel scam that involved buying up dying DME suppliers, and thereby obtaining the existing DME suppliers’ licensure (registration?) with the Medicare program.   Whoever bought up those dying DME businesses then abused that portfolio of strategically purchased DME suppliers’ credentials.  A lot. Billed the fill-in-the-profanity-here out of them.

Then, last I heard, successfully skedaddled with the cash. 

A notable black eye for Medicare, at the very least. That’s where I lost the thread.  But that’s a novel and well-thought-out scam.  Perhaps that was a one-off.

Separately, when you get right down to it, this Administration knows a thing or two about Medicare fraud.  Here’s a Washington Post article about the several Trump pardons of individuals convicted of serious Medicare fraud (reference).  It’s not often that you get a name to attach to a $1B Medicare fraud scheme.  In the context of “pardoned by the President”.

 

Conclusion

 

This morning, the plants in my yard are weighted down with a quarter-inch of accumulated sleet.  Meanwhile, the sleet has turned to sporadic rain.

I am sitting in front of a lit wood stove, as I write this.  Between the weather, and the way the USA is headed, I needed some fire.

Something basic.  Comforting.  But real.  Something I think I understand.

I want my life to be more along the lines of a stack of kiln-dried firewood.  And a bit less like a dumpster fire.

If that’s not too much to ask.

Post #2126: Oh, the price of gold is rising out of sight, III

 

Gold blew through $3100 $3200 $3300 / ounce this morning.

 

As noted in prior posts, an increase in the price of gold is never a good thing.

By my reckoning, we’re now a couple of hundred dollars off the all-time high, in the real (inflation-adjusted) price of gold, in dollars.

My interpretation is that three months of Trumpism managed to do for Russia what 15 years of agitation by the BRICS countries could not.

By reneging on our international commitments, turning on our former allies, aligning ourselves with Russia, and giving an absolutely ignorant crew of knuckleheads complete control over tariffs …

… I do believe we’ve managed to destroy the dollar’s role as the key international currency AND cripple much of our industrial capacity.  In one fell swoop.

Restated, by setting large and rapidly changing tariffs, with no policy goal beyond making The Leader happy, we’ve slit our own throats.

It’s just going to take a few months for that to be completely obvious.

Putin’s ROI is beyond calculation.

Post #2124: Tax day bullet fee.

 

Tax day felt different this year.

I considered, then rejected, asking for an extension for filing.

Not because I hadn’t filled out the 1040 yet.  Not even because I owe a lot of tax this year.  Which, by my middle-class standards, I do.

Because it galls me to pay money to the incompetent asshats who are currently in the process of running the country into the ground.

It feels like a bullet fee.  (The fee that certain governments charge, to the family of an executed prisoner, ostensibly to pay for the ammunition used by the firing squad.)

Like I’m paying them, for killing my country.

But also because I’m confused about whom I am sending my Federal tax dollars to.

In the past, when the U.S. still operated under the basic framework of the Constitution, I was sending my money to the Congress.  (Even though the Treasury Department collected it).  That’s because the Congress determined how that money was spent.

But now, apparently, the President can pretty much do as he pleases, tax-and-spending wise.  Though I guess if it’s an income tax, it still requires an act of the Congress.  For now.

In any case, as I read it, with respect to your 1040 and April 15th, you can legally delay filing, but you can’t legally delay paying.  Or, at least, not you, the little guy.  The IRS form on which you request a delay in filing your return very specifically requires you to pay an estimate of the tax that is due.

So, if I want to stay within the law, being just a citizen, they get my money whether I file on time or not.  A filing delay is just a delay in providing the supporting paperwork in the form of a tax return.

The only way I can see not to pay, is not to file, period.  And after a lifetime of being a law-abiding taxpayer, I can’t see me doing that.

So I did my taxes on autopilot.  And Turbo Tax.

Held my nose.

And gave the Federal government my money.

And so helped them continue to kill off what’s left of the U.S.A.

Once you have paid him the Danegeld, you’ll never get rid of the Dane.

Post #2120: Oh, the price of gold is still rising out of sight

 

Gold blew through $3100 $3200 an ounce this morning.

 

As noted in prior posts, an increase in the price of gold is never a good thing.

Looking on the bright side, a good chunk of this last push was merely from dollar going down the toilet. 

That should happen because gold is an internationally-traded commodity.  It’s a global market.  When the value of the dollar falls, the value of gold, expressed in those dollars, rises.

I guess I need to start a countdown or something, as by my calculation, if gold tops $3519 (or so), that will be its all-time high in inflation-adjusted (CPI-adjusted) terms.

So, right now, gold is just (1- $3234 / $3519 =~) 8% below its all time high, in real (inflation-adjusted) terms.

I described the economic conditions under which gold set its previous high, in a recent post on this topic:

Post #2112: Oh, the price of gold is rising out of sight

Before that, my most recent prior post on this topic was from half a year ago:

Post #2017: The price of gold is up. That’s never good.

Post #2119: Schrödinger’s Tariff, II

 

Further reflections on our current tariff situation.

Photo Source, Nobel foundation – http://nobelprize.org/nobel_prizes/physics/laureates/1933/schrodinger-bio.html, Public Domain, https://commons.wikimedia.org/w/index.php?curid=6209244

 

 

 

 

 

Point 1:  This sort of thing — the current tariff situation — is part and parcel of the “unitary executive” package that MAGA installed in the Federal government.

1.1  If you concentrate all the power in the hands of an individual, as the MAGA party has succeeded in doing, here in the U.S., with few-to-no effective restraints (e.g., Congress cedes control, Supreme Court defers, ignore everybody else),

1.2  And if The Leader has some wacky ideas, is unteachable, perhaps easily influenced, aging, …

1.3  You’re stuck with The Leader’s decisions, anyway, because that’s how you set it up.

Stripping away our long-standing system of checks and balances is an inherently high-variance strategy.  People imagine great governing by a philosopher-king.  But you can get kleptocracy. Sometimes kakistocrasty.  Not to exclude both at once.

And sometimes, in some important areas, unleashing The Leader is a dangerously crazy thing to do.

In hindsight, I’d like to think that a lot of our leadership now realizes that giving this man (the President), this weapon (unlimited control over tariffs) was not a good idea.

But as long as the House continues to take this lying down, there is no off button.

Checks and balances.  Maybe God got that part right.

I miss checks and balances.

Addendum:  And, after reading Krugman’s piece this morning, I’d maybe go so far as to say that the fundamental uncertainty of unitary-executive decision-making is incompatible with the traditional role of dollar-denominated assets as safe-haven assets.  These idiots may have just managed to dislodge the dollar from its role as the foundation currency of the international financial system, because we can no longer be trusted.

Point 2:  Do we need a Central Committee now?

How do other authoritarian regimes avoid this problem?  This problem being the potential for The Leader to make spectacularly crap decisions, against all sane advice?

Maybe they don’t.  Here I’m thinking of some of the initiatives under Mao, at least some of which almost surely impoverished the Chinese people.  Stalin’s planting of Lysenko’s wheat, maybe.

So, this may simply be an unacknowledged downside of the unitary-executive approach to Federal government.  You will get some nut-job decisions on really important issues, and you have given yourself no recourse.

Anyway, if we’re tossing all the old-fashioned checks and balances, is it really optimal to put nothing in their place?  That’s looking like a big “no”, to me.

So I wonder if we might take some clues from successful autocracies elsewhere.  Maybe we need some new entity — the King’s Privy Council, the Party Central Committee, the Gang of Eight — to provide some filtering beyond whatever occurs within The Leader’s brain.

I don’t think a Cabinet full of sycophants fulfills this role.  I wish the MAGAs would come up with something that does.  They’re running this show.

Post #2118: Schrödinger’s Tariff.

 

Surely you can complete the joke yourself.

Photo Source, Nobel foundation – http://nobelprize.org/nobel_prizes/physics/laureates/1933/schrodinger-bio.html, Public Domain, https://commons.wikimedia.org/w/index.php?curid=6209244

 

Any given Trump tariff is neither alive nor dead …  until I open up the box each morning and look inside.

And, to take the analogy one step further, for the the un-predictable decay of an atomic nucleus, substitute the un-predictable flipping of some neuron or neurons, in Trump’s aging brain.

To be fair, maybe by flailing about, with this pain-inflicting flail marked “tariff”, he’s somehow making things better, by beating down the opposition.  Or beating “them” down, more than “us”.  Or something.

But then reality takes hold and you have to say, “Yeah, like beating the hell out of Canada for all the bad things they were doing to us.”  Didn’t we even have a free-trade agreement with those guys, going into this?  What dummy signed that?

And and and.  And what does fentanyl have to do with aluminum and steel in the first place.  And what does Canada have to do with our fentanyl problem?  The answers are nothing, and next to it, and plenty more where those came from..  Car industry integration.  Mexico.  And and and.

So, no, at best I’ll have to think of these as Schrödinger’s tariffs.  And as such, they are fundamentally different from the tariffs of the past.

Note that I do not say “better”.   But different, for sure.

Post #2117: Some More of God’s Greatest Mistakes

 

I stole that from Douglas Adams.  But this post sort of feels like that, because this post is about an issue with the Constitution.

Recall that, originally, the Constitution called for the winner of the presidential election to be President, and for the second-place finisher to be Vice-President.  Presumably, then, President and Vice-President were from different parties. 

As a consequence, under that original system, if you impeached (and convicted) a President, then you automatically ceded the Presidency to the opposite party.   For example, if the President did crazy stuff via Executive Order, you could impeach, convict, remove, and so stop that.

But now, if they impeach the President, all that does is put another guy in place, to implement the rest of Project 2025.  Under these conditions, you cannot use impeachment as a way to slow or halt the implementation of the polices that got the current President impeached.

(Impeach, say, if a great depression occurs, and the Trump tariffs get the blame for triggering it.)

Plausibly, that’s consistent with the “high crimes and misdemeanors” clause.  They were thinking of impeachment as a way to remove a single rotten apple, not as a way to implement or (in this case halt) policies.

Conclusion

I guess I keep looking for the off button.  The plug that may be pulled.  The glass, only to be broken in emergency.

Plausibly, under the original rules, impeachment was a tool that could have been used if the U.S. were headed off a cliff, on the path set by the current President.

But under current rules, that’s no longer true.  Impeachment is no longer a tool for getting the U.S. off this path, no matter what happens.

I wonder if the Founding Fathers had any notion of what our current situation would be?  Surely they didn’t foresee government by executive order, or the Congress abandoning its legal prerogatives over spending.

Basically, there is no off button.  Wherever this leads, we just have to deal with it.

So far, every time I think we’ve finally reached a high-water mark for crazy, the world proves me wrong.  Today, the U.S. tariff on all Chinese imported goods is 145%.  But the Chinese tariff on selected U.S. goods is only about 85%.  (Maybe they need another day to catch up.)

Against recent history of single-digit average tariff levels for most of the developed world. Economist Paul Krugman characterizes this as the largest international trade shock ever.

Gold is nearing $3200 an ounce, about $350 shy of its all-time peak, in real (CPI-adjusted) terms.  That’s never a good sign.

This is not going to end well.

At some point, in the not-too-distant future, I think the U.S.A. is going to be scrambling for the off button.  Only to realize there isn’t one.

Post 2116: Weight loss, meet Trump-o-nomics.

 

Suddenly, it seems to me that I haven’t saved enough for my retirement.

Which is a pity, as I am already retired, and have been for some years.

What changed?

First, realize that a good chunk of my wealth is tied up in my house.  It’s in Vienna, VA, in a Northern Virginia economy strongly dependent on federal employees and federal spending.

Ah.  At this point, I think there should be an expectation of falling real estate values around here.  But who knows.  Flat-at-best, say.  That, versus prior thinking that real estate always appreciates, right?

Next, by dropping (now) 95 pounds of weight, my (subjective) life expectancy should be … longer.  That’s a good thing.   But it does have a downside, which is more years of life over which to spread out the available money.

And, now, third, the rest of Trump-o-nomics.  The tariffs alone pretty much guarantee poor returns to a financial portfolio in the short run, and who knows how much lost productivity in the long run.  The significantly-heightened threat of a global recession just adds to portfolio-return angst.

Conclusion:

The world has changed since I set aside funds for my retirement.

What seemed like a slam-dunk, asset-wise, now no longer looks quite so bulletproof.  My house probably should lose value, in response to the throttling of Federal employment and spending.  Surely, tariffs and whatnot will do the same for the value of my 401K (equivalent).

Simultaneously, a consequence of weight loss is that I should plan to need money  longer.

Weight loss plus Trump-o-nomics.  A double whammy.

I never planned for either of them.

Post #2115: Some round number estimates of tariff impact

 

Source for image:  The Far Side.

Edit:  Skip this, just read the “days and weeks” quote that came out Sunday evening 4/6/2025, from Commerce Secretary Lutnik, shown at the end of the post.  Looks like somebody in the administration has finally figured out that this is a terrible idea, and they are now looking for a way to declare victory and call the whole thing off.

At least, that’s what I hope the quote from Lutnik means.

Don’t focus on the microeconomic effects.

I could recite the Econ 101 of Why Tariffs are Bad.  But the picture to the left illustrates the gist.

The popular press tends to focus on the “microeconomics” of the situation.  That is, the impact on a single product or industry, alone.  E.g., here’s what this will do to the price of a car, and so on.  Here’s why a steel tariff is good for steel makers, but not for industries that build things out of steel.

To be clear, real (that is, mainstream, having-a-degree-in-the-subject) economists hate tariffs.  Boiled down, from an industry-level perspective, tariffs are not merely a case of robbing Peter to pay Paul, they ensure that both Peter and Paul work less efficiently than they could, thus making everybody worse off, on average.  It’s one of those things about which there is widespread agreement among mainstream economists, backed up by decades of evidence.

Except in a handful of cases, in the modern economy, tariffs are little more than a seductive way to shoot yourself in the foot.

Simply put, any amount of money you think you can raise with tariffs, you can raise that more efficiently, resulting in higher GDP and higher employment, if you raise that with an income tax.  But, as I have previously noted, since the whole point of the Trump tariff is to substitute sales (consumption) taxes on the middle class, for income taxes on the wealthy, that point is not salient to the current administration’s thinking.

Focus on some round-number macroeconomics instead.

In round numbers, I’m guessing that the first-year revenues from the Trump tariff will be roughly the size of the U.S. budget for the Department of Defense.  (I’ll present the estimate below, such as it is.)

What would you expect to happen to the economy if the Feds shut down the Department of Defense, all at once, on some random Wednesday? Forever.   And then simply pocketed what used to be spent, thus removing that from aggregate demand for U.S. goods and services?  (Though, in reality, simply borrowing less to make up for the remaining annual budget deficit.)

My best guess is that the amount of money collected by the Trump tariff will be about the size of U.S. Defense spending.

So withdrawing that money, out of U.S. aggregate demand, via tariffs, ought to have about the same impact as closing the DoD and not increasing Federal spending.

Best guess, this should roughly double unemployment, as it works its way through economy in the short run.  Call that year.

So, my prediction, FWIW, is that U.S. unemployment will 7.9%, in April 2026.

Like so:

The only sleight-of-hand above is the “fiscal multiplier”, for which you are invited to take your own guess, if you don’t like mine.  That’s to capture the immediate follow-on effects of the initial drop in U.S. aggregate demand caused by the tax increase (the tariff) assuming no offsetting federal spending increase.  The Fiscal Multiplier is an abstract notion, meant to capture the diffusion of spending across the economy, but in concept it’s no different from when the the local factory shuts down, and the local bars and restaurants soon follow suit.  The actual reduction in economic activity, from the original shuttering of the factory, is somewhat larger than the loss of the factory jobs alone.  How much larger, on average, that’s subject to debate.  And, given that we don’t even know what the fallout of this is going to be, on consumer prices, it’s a bit early to have that debate.  So 1.5 is a nice round number, and frequently appears within the range of what sane people, those more learn-ed than I in this matter, find plausible.

What about the long run?

An eight-percent unemployment rate is a recession, for sure, but hardly the end of the world as we know it.  To get to the real potential for calamity, we need to speculate on what happens in the long run.

First, elasticity of demand — the reaction to the price changes — should be very nearly a wash.  And that’s because it applies to both our imports of foreign goods, and to foreigners’ imports of our goods.  Surely, we will use less of the now-pricier imports, all other things equal.  But so will foreigners, of our goods.

As predicted (and sometimes pre-announced), our trading partners have wasted no time imposing tariffs on their imports of American goods.  And so, if the average price elasticity of imports and exports is about the same, and if foreigners impose tariffs on our goods equal to our tariffs on theirs, then the net moderating effect of price elasticity should be a wash.  Our demand for foreign goods will decline, reducing the size of this new tax.  But at the same time, foreign demand for U.S. goods will decline, as they impose their retaliatory tariffs.  The dollar value of our goods imports and exports are not hugely different ($3.3T vs $2.1T).  As long as demand elasticities for imports and exports are about the same, these effects should roughly cancel.

The real uncertainty is in what else might happen.

Once these tariffs take this chunk of spending out of U.S. aggregate demand, then the economy is, for want of a better term, biased toward recession.  Like a rock on a slope.  Nudge it hard, and it now has a tendency to roll further downhill.  Anything from general loss of confidence, to a world-wide economic downturn — will feed into the unemployment increase created by the tariffs.

Nobody has a clue how that will work out.  But for sure, all of those factors are more of a worry in the context of an U.S. economy that is already surely headed for recession.

On account of the trade war we started.

Conclusion

A major recession is already baked in.

That’s purely from withdrawing 2.5% of U.S. aggregate demand, via these new taxes on imports, and not spending it.

Maybe the Republicans will succeed in giving that money to the wealthy, in the form of further tax cuts.  But the wealthy have a low “marginal propensity to consume out of current income”, meaning that they save most of their income, rather than spend it.  In an ugly business climate, where nobody is willing to take that (now-)excess savings and invest it, that still creates the conditions for recession.  Softens the blow to aggregate demand a bit, to take those sales taxes an, in effect, shovel them into the pockets of the  wealthy.  But you can’t make the wealthy spend their additional income.  As economic policy, this is classic “you can’t push on a string”.

At this point, the question isn’t whether jerking the U.S. economy around like this is a good idea.  It’s not.  We’re going to get at least a major recession out of it, in short order, just from the sheer size and abruptness of it.  That part has nothing to do with imports and exports per se.  Any tax hike amounting to 2.5% of GDP, with no offsetting increase in Federal spending, would do the same.

The only question is, how bad is this going to get?

At this point, we’ve all-but-destroyed NATO, abandoned an ally in the middle of a war (to the point of withholding intelligence information, which shows the treatment of Ukraine isn’t about the money), torn up all of our international trade agreements, … .   And we’re not three months into it yet.

Putin could not have asked for a better return on investment.  Pardon me while I go buy some shares in Deutsche Bank now.

Addendum:  Emily Litella lives!

I read this quote below, and just about lost it.  Here’s the U.S. Secretary of Commerce, just up on the CNBC website, emphasis mine:

 

 

Commerce Secretary Howard Lutnick said Sunday ... 

“There is no postponing. They are definitely going to stay in place for days and weeks,” Lutnick said. ...

All this chaos, with literal trillions of stock-market losses, making enemies of former friends like Canada, killing consumer and business confidence, likely tipping the U.S. in recession, but the plan is now to keep those tariffs in place for days.  Maybe even for whole entire weeks, if need be.  All that, so that Trump can have foreign governments kiss his ring, and cut side-deals to have their tariffs lowered?

And then say “never mind”?

There’s stupid, and then there’s crazy stupid.

That’s so stupid, it’s not credible.  There’s no way that “days” of tariffs was the original plan.

The only thing that makes sense is that the Trump administration is (finally!) seeing what a bad idea this is.  They of course will never admit to making a mistake.  So this has the look of a trial balloon, for ending this trade war by declaring victory and going home.

So they can save face, declare this a huge win instead of the huge blunder that it was, blame the liberal media, or maybe Biden, and move on.

If so, you really have to wonder what’s next.

Maybe they’ll pretend to launch some nukes, just to see what happens.