Politics

A new study has been conducted by J.P. Morgan that is revealed that the latest round of tariffs imposed by Pres. Trump will cost US households an additional $1000 per year. This goes to show exactly how much the average person suffers during a trade war. Right now, the tariffs are costing us an additional $600 per year, so that number is likely to go up.

The company got their figure looking at what a 10% tariff would do on the hundred and $12 billion worth of Chinese imports. The president has announced that this tariff will be imposed at the start of September, but he is currently considering scaling it back. Trump figures is not a good time of year tax Americans this close to the Christmas season.

The tariffs would be slapped on two very popular holiday items like laptops, toys, cell phones, and other electronics. If the tariff that he threatened goes through, which was a 25% tariff, it would cost us $1500 per year and it would dramatically slow down the busy Christmas shopping season.

“What distinguishes China Phase III tariffs from preceding tariffs is the impact to Consumption and Capital goods,” analysts wrote. While previous tariffs focused more on “intermediate goods,” this batch “suggests that the expected consumer impact should be larger in the latest round,” the bank’s analysts wrote.

The Tariffs Are Offsetting Any Tax Cut Gains

There’s really no point in cutting taxes and then turning around and placing increasingly higher tariffs on Chinese products. Currently these tariffs are offsetting any tax break us Americans were getting. It was estimated that around 80% of us were seeing some sort of tax decrease. Now that number is arbitrary.

“The impact from reduced spending could be immediate for discretionary goods and services since tariffs are regressive,” they wrote. “Unlike the agriculture sector which is receiving subsidies/aid to offset the impact of China’s retaliatory actions, there is no simple way to compensate consumers.”

If there’s one weakness that Pres. Trump has going into the 2020 election, it will be the tariffs and the impact they have on the economy. There’s no doubt that Trump is going to run on lower taxes and a much higher stock market. But the highs of the early part of his administration will continue to be dampened as the stock market keeps taking hit after hit, farmers are feeling an increasing brunt of the damage, and tariffs offset any benefits of the tax cuts.

This is going to make Pres. Trump very vulnerable in 2020 unless a new deal with China is created and put into place.

Friday last week ended with a huge bang. It was announced that Trump has agreed to a new Phase One deal that would effectively put the trade war on hold. The news came at the end of the day, so the stock market rose sharply, but didn’t have too much time to stretch its legs. Many investors were expecting the market to continue towards a massive march upward today. That was until China appeared to throw a little cold water on the whole thing.

On Monday, China said there’s still a bit of work to do before the two largest economies in the world can hammer out the new trade agreement. There is certainly a lack of trust between the two sides. President Trump, at one time, declare the trade war to be over, only to throw on more tariffs a few days later. So, that means Beijing is being cautious.

“While the negotiations do appear to have produced a fundamental understanding on the key issues and the broader benefits of friendly relations, the Champagne should probably be kept on ice, at least until the two presidents put pen to paper,” wrote the state-owned China Daily. Essentially, there’s still a lot of time between now and December for talks to fall apart.

“Based on what I know, China-US trade talks made breakthrough last week and the two sides have the strong will to reach a final deal. Initial statement of the Chinese side is moderate,” he tweeted Monday morning. “This is China’s habit. It doesn’t mean China’s real attitude is not positive.”

The New Trade Deal

On Friday of last week, both China and the U.S. agreed on principal on a new trade deal The whole thing is expected to take about 5 more weeks to complete. That doesn’t mean there aren’t benefits being played out right now. China has said they will once again start buying more U.S. agriculture. This is good news for struggling farmers as we enter the harvest season.

China has also stated they will be making reforms on how they deal with intellectual property. That was one of President Trump’s biggest complaints. In return, the U.S. said they will not raise more tariffs. Trump was threatening to increase Chinese tariffs from 25% to 30% by October 15^th. Now that it has been put off, the two sides seem to be warming up to increased talks.

Due to China’s careful optimism, stock futures were a bit more muted than expected on Friday. We’ll see how this deal plays out in the next few weeks. Hopefully a deal can be done and the trade war will be over before the holiday season gears up.

There’s an ever-growing debate about how social media sites influence voters. Many people view the issues as moral and civil. The same types of questions Facebook faced during and after the 2016 election appear to remain. This is after many criticized the company for allowing President Trump to run ads they viewed as false ads.

Facebook, on the other hand, appears to be taking up for free speech. They say they’re not going to censor the President of the United States, even if he lies about an issue. That can be determined as politics as usual. What candidate doesn’t lie or even stretch the truth a bit? Should then Facebook censor all political ads? And who gets to determine what claim is legitimate and what isn’t?

Facebook’s position is, if a candidate or the president lies, it will be called out by the media. That is their job. Facebook’s job isn’t to decide what viewpoint is presented. All sides and all viewpoints have equal rights when you honor free speech. Still, not everyone agrees. This aggravation stems from 2016 when they view certain ads and ‘fake news’ swing the election in Trump’s favor.

Facebook and Free Speech

The latest criticism came after the whole Joe Biden/Trump/Ukraine controversy. As the impeachment inquiry heats up, Trump was using the opportunity to run ads against Joe Biden. Joe Biden is the current Democratic frontrunner and is, at this time, likely to win the nomination. Biden felt the ads were false and asked Facebook to take them down. They said no.

“Our approach is grounded in Facebook’s fundamental belief in free expression,” Katie Harbath, Facebook’s public policy director, responded to the Biden campaign. “Political speech is already arguably the most scrutinized speech there is. Thus, when a politician speaks or makes an ad, we do not send it to third party fact checkers.”

The opposition thinks free speech is good, but that is often in a world without Facebook. On Facebook, everyone is able to retreat to their individual corners. We only receive the news and information we agree with, and block the stuff we don’t. So, if President Trump or any candidate makes a false claim, they often don’t see anything to counter it.

Not to mention, Facebook ads are often highly targeted. The president can reach anyone he wants with his message. That is a concern for Trump’s opponents. Facebook doesn’t see it that way. They are a platform that allows all the candidates equal opportunity. Fans and supporters of everyone running for president in 2020 get to see whoever they want to see. If their mind is already made up, then that’s that. You should force someone to see content they don’t want to see.

We’re another day closer to the 2020 election. Joe Biden is borrowing a page out of Bernie Sanders’ playbook. That’s easy to do when he’s at home recovering from a heart attack. Biden chose now as the time to present to the voters his $750 billion education plan called “Education Beyond High School.” This plan would eliminate a tax loophole the wealthy use that caps itemized deductions. He will take that extra money and put it towards education.

Education would include investing money towards improving community colleges, helping workplace training programs, and so much more. By training workers, it gives them a leg-up on finding better work. A lot of jobs require specific training and experience, so Biden hopes to provide that.

Still, we once again hear a Democrat say that the super-rich need to pay their fair share. No more tax loopholes! This particular tax loophole allows the rich to buy/sell a stock or capital asset without paying a tax on it. It allows for more investment in the economy. Biden hopes to remove the loophole so there’s money to go towards his entitlement package.

This was also an idea President Obama had in 2015. He proposed removing the loophole, but decided against it. The Tax Cuts and Jobs Acts went far in helping to double the number of deductions a person can claim. There was a cap placed on certain state and local deductions of $10,000. That hurt states where taxes are much higher.

Helping Americans Find Work through Education

Biden is less of a socialist than most of the candidates running. His ideas are closer to center. He says that workers who don’t go to college suffer the most. Twelve years of general education presents far less opportunities than they used to. Our economy and way of life is becoming more technologically centered. That means jobs in these sectors are growing rapidly.

While they’re growing at a fast pace, there aren’t enough qualified workers to take on this field. Biden hopes his $750 billion investment to help train Americans will go a long way in helping more people find better paying jobs across the spectrum. The cost of getting a college education is in the way as well.

That’s why this program would also make the first two years free for anyone who wants to go to a community college. A two-year degree is much better than having no skills outside of high school. Still, you don’t need a degree, but some type of training or trade education will go a long way in securing one’s future.

There’s clearly no love between Elizabeth Warren and Pres. Trump as they differ in just about every issue. The president recently did something that Warren wasn’t too happy about: hiring Robert Cameron as the newest student loan ombudsman. In fact, the move angered her so much that she sent three letters to the Consumer Financial Protection Bureau. Treasury Secretary Steve Mnuchin, and the newest ombudsman himself as well.

Warren claims that Cameron is scandal-plagued, corrupt, and should never be the newest student loan watchdog. This position was created solely for the purpose of protecting students who take out student loans. There’s a lot of predatory behavior in the student loan game. Many Americans become suckered in by false ads and scammed by their lender.

It’s the job of the ombudsman to gather together all the complaints and help settle any disputes that have occurred. But according to Warren, Trump chose the wrong person for the job. She says he himself has a history of corruption within the industry. It’s also Cameron’s job to advise Congress, the Treasury Secretary, and even the CFPB on improving the student loan process.

The Burden of Student Loan Debt is Crushing

Currently in the United States, 44 million Americans owe $1.6 trillion in student loan debt. This is a major burden and a crisis that is hurting our economy and crushing our young adults. They are just starting out in life. The last thing they need to do is to graduate tens of thousands of dollars in debt.

Studies have come out revealing that many young Americans are putting off major life decisions on hold. Things like getting marriage, buying healthcare, starting a business, saving for retirement, and even having children. Many are choosing to move back in with their parents. They simply cannot afford to pay their student loans and live on their own.

Chairman of the Federal Reserve, Jerome Powell, testified in a hearing that the student loan crisis could cause long-term ramifications. They could even drag on the US economy in the future. Student loan debt has become a major talking point among 2020 presidential candidates. Warren is one of the candidates who wants to eliminate almost all of the student loan debt out there.

In Warren’s mind, appointing Cameron to the position is “mind-boggling.”

“A former PHEAA executive’s appointment to the role represents the worst form of revolving-door corruption and conflict of interest, and it epitomizes industry capture of our government. Given Mr. Cameron’s responsibility for PHEAA’s compliance with federal law, regulations, and programs, and PHEAA’s record of compliance failures, it is clear that student-loan borrowers cannot count on Mr. Cameron to uphold their interests,” she writes.

Warren then called on Secretary Mnuchin to deny Cameron’s appointment. Whether he will listen is probably doubtful.

The Democrats appear to continue being in lockstep on what we should be doing about student debt. U.S. citizens currently owe $1.6 trillion dollars. Bernie Sanders recently tweeted that going to college isn’t a crime, so we should get rid of the costs and debts associated with it. Ilhan Omar appears to agree with him. She also calls for Wall Street to handle the problem.

“As someone who’s part of the debt generation, I wanted to make sure that we were creating a proposal that would alleviate the kind of stress that people are dealing with,” the 37-year-old Democrat from Minnesota said. According to her, the process would be easy. Add a tax to every transaction and the money would accumulate rapidly.

“We had the opportunity to bail out Wall Street, and now Wall Street gets the opportunity to bail out the American people,” Omar said. To her, it doesn’t matter if someone is wealthy and able to pay back their loans. Everyone would get forgiveness. The full $1.6 trillion in student debt would be paid off. Both sides of the political aisle appear to disagree about the process.

Student Debt and the Economy

Sanders says a small tax on Wall Street transactions would raise $2.4 trillion in about ten years. The CBO, who often looks into these matters, hasn’t backed up whether that’s true or not. He still believes it’s essential to try. Regardless of what party you’re a part of, any kind of massive debt like this hurts the economy.

“This debt isn’t a rich-person problem,” she said. “Trump and Trump’s children are not benefiting from this cancellation. They don’t carry student debt. Most of the people who carry student debt are the poor and the middle class.”

There is a lot of truth to this. It’s mostly the lower- and middle-class people struggling to pay off their student debt. Many recent surveys found that millennials in particular were putting of making many major life decisions. They were still living at home, waiting to get married and start a family, and even not buying the things other generations got to buy.

This does have a large cumulative impact on the economy. By wiping away this debt, it makes life so much easier for the 44 million who have student debt. They then have more money in their pocket, which they will spend. This could be a massive spark the economy needs to keep it going strong.

Banks are federal entities that receive protection from the federal government. If your bank is FDIC protected, that means that the bank is insured and safe. That is also posed a problem for many marijuana businesses across the country. As many states are now legalizing marijuana, and many states that allow legal medical marijuana, the businesses that sold the marijuana legally were still not able to use a bank to save and secure their funds.

That’s because marijuana is still considered a federally banned substance. On Wednesday, the house officially passed a bill called the SAFE (or Secure and Fair Enforcement Act) that would give banks permission in the legal ability to finally offer financial services to legal cannabis companies. In short, these marijuana businesses could effectively start using a banking system to secure their funds.

This is a massive victory for the industry as a whole. The vote took place in the US House of Representatives and it was an overwhelming victory of 321 to 103. It was mostly Democrats who voted this through, led by Colorado Representative Ed Perlmutter. His state has legal marijuana for recreational use, so it was important for him to provide this growing industry the means using a federally backed bank.

The difficult part now is going to be how the Senate handles this bill. Still, even if it’s denied by the Senate, marijuana advocates still say this is a major win. To at least get one part of the government to embrace the industry really goes to show how far we’ve really come on this issue. Even as more states become legal, marijuana is still prohibited federally.

A Big Day for Marijuana Advocates

These types of battles are often won one day at a time. It’s little incremental pieces of the puzzle that get solved and put together, eventually leading to the thing become completed. Marijuana advocates have been fighting for decades to both legalize the plant, reduce restrictions, and even prevent people from going to jail simply for consuming marijuana.

While there’s been a lot of victory in individual states, to finally have some movement within the federal government is a huge jump. Kevin Murphy is CEO of Acreage Holdings, one of the largest marijuana companies in the country. He says that the SAFE Banking Act was “big day in history going forward with cannabis.”

“It’s a big deal because it’s the first meaningful step in recognizing the fastest growing industry in the United States,” he said. “It’s a legitimate business, it employs tens of thousands, and think about the hypocrisy we’ve lived with in this space — the IRS is willing to collect your taxes… but they’re not really willing to have banks bank the industry.”

There’s been a major push in the Democratic party as of late to push gun control. In the wake of several mass shootings this year alone, the calls for tougher gun laws are louder than ever. More moderate Democrats are simply asking for tougher background checks and Red Flag Laws designed to allow gun privileges to be taken away from people deemed harmful to society.

Even these more slight-of-left views are being completely rejected by the right who will stand by their belief that the Second Amendment must not be infringed. The NRA is a weaker beast than it used to be, but they still have a powerful crowd of pro-gun and pro-liberty fans and politicians on their side.

For a long time, the right has known that the left has never understood nor accepted the right’s love of guns. Yes, many on the left are gunowners themselves. They are hunters and protectors of their own homes, just like those on the right side of the spectrum. The difference is, they are less resilient towards tougher gun laws and many calls for these laws to be implemented.

Still, the right and their allies won’t budge or compromise when it comes to the Second Amendment. They’ve had a deep fear that the left only cares about taking away all guns, but they can’t ever admit that. They will start off slow and with each new law, and shootings still continue to happen, requiring increasing amounts of control on guns until they’re gun. A conspiracy theory? Perhaps, but one rooted in at least a little bit of truth.

Beto Wants Your Guns

As the left and right continue to debate over gun rights, the left has always said the right was too paranoid. “We don’t want to take your guns!” they’ve shouted. “We just want common-sense gun reform.” Well, the cat is now out of the bag. A certain presidential candidate from Texas is now saying he wants your guns.

It’s not uncommon for candidates to make outlandish promises while out on the field before election day, especially in areas that are heavily right or left. You need to make those extreme promises to stand out, but then get on the debate stage amongst other candidates and play nice. The goal is to stay as center as possible to capture the lightning in the bottle.

This time around, that wasn’t the case. In a rousing speech, Beto O’Rourke said the words that rang across the country: “Hell yes, we’re gonna take your AR-15, your AK-47.” This stoked more fears among the left. What they had always suspected would happen is coming true. They are now open about wanting to take your guns.

“In some regards, this horse is out of the barn,” said David Chipman, a retired agent with the federal Bureau of Alcohol, Tobacco, Firearms and Explosives and now the senior policy adviser for the Giffords group. “For years we’ve allowed these to be sold.” The question now is whether that’s actually a feasible plan.

Would a Gun Buyback Work?

There are currently more guns in the United States than people. Estimates are there are 400 million guns out there today and trillions of rounds of ammo. Even if you remain focused on just confiscating AR-15s and AK-47s, those numbers can top as many as 16 million weapons. Beto seemed adamant that the first thing he would do as president is take those types of guns.

How exactly would that take place? More importantly, how would he enforce that federally? States may not go along with the law, especially the deep red states that would probably rather succeed, like Texas, than go along. Again, another conspiracy theory, but Texas seemed ready when Obama was elected.

If the logistics of enforcing the law were enough, the cost is another major issue. The price tag of hiring federal law enforcement agents to hit every home to force them to comply as well as the full cost of the buyback and disposal would easily hit in the billions. Yet, Beto believes most gun owners are law abiding citizens who would willingly give up their weapons.

“Once you start talking about taking guns away, especially legally owned firearms by responsible gun owners, you’re just going to alienate a whole huge portion of American citizens. They’re just not going to stand for that,” said Chris Waltz, the president and CEO of AR-15 Gun Owners of America. “This is what they feared.”

The Logical Conclusion

The logical conclusion is that this probably won’t happen. The Republicans still control the Senate. Even if the law was signed after Democrats take all three branches of government, lawsuits would then ensue. The battle would make it all the way to the Supreme Court, where it would ultimately be shot down.

That doesn’t mean we won’t see some isolated approvals in blue states for red flag laws and comprehensive background checks. Many states have already implemented these laws with no real effects in curbing gun violence. That’s because the United States has open borders between states and anyone can bring weapons into California or New York. So, would a federal ban help?

“Constitutional rights aren’t based on what you like. What’s the slippery slope of this?” said Lara C. Smith, the national spokeswoman for the Liberal Gun Club, a nonprofit group of liberal gun owners. “If they’re going to take away these rights, what other rights are they going to take away?” Even liberals close to the middle think this is unfair and unconstitutional. Where it goes, no one knows just yet, but Beto is currently polling near the bottom of the pack.

A lot of the 2020 Democratic candidates so far have made plenty of promises. From offering free health insurance to free college, paying off student debt and even offering every American $1,000 extra per month. Of course, the biggest question from critics and supporters alike has been how the U.S. expects to afford such expenditures.

The answer is usually the same: implement a wealth tax. Democrats staunchly believe the rich in this country should be taxed way more than they are. The goal is to redistribute the wealth so a handful of people don’t control most of the wealth. Whether it’s a good idea to actually start increasing taxes for the wealthy has yet to be seen, but we’ve already had some impact in the past.

Bill Gates is definitely in the camp of believing the wealthy should pay more. As one of the richest men in the world, one wonders why he doesn’t pay out more than he’s expected to if he thinks this way. But he also thinks it might not be good for business in the U.S. and doubted we could ever pass such a law.

“I wouldn’t be against a wealth tax,” he said. “Unless you get a lot of nations … dealing with some of the problems – like people leaving the country or how do you do these valuations that can get quite complicated … if society got behind a wealth tax, yes you can raise money that way.”

Leaving the Country

Essentially Gates is saying that you can certainly raise more money to pay for entitlements by taxing the rich, but it’s a complicated process. The entire society as a whole would have to get behind it for it to work. Otherwise, suddenly those costs will be passed down to the consumers. Extra costs already are.

Consider the trade war with China. Many opponents of the trade war look at the fact that costs are going up because the additional tariffs are being passed down to consumers. How do they not think the same won’t happen if the government dramatically increases taxes on these same companies?

The reality is, businesses are in business to make money, not pay for entitlements. If they don’t pass the buck down to us, then they will cut jobs or move out of the country. They certainly won’t stay where it’s not profitable to do business. Gates uses Europe as an example of where this happens often.

He says most European countries don’t implement a wealth taxes because it’s “too easy for wealthy people and businesses to pull up stakes and move to a new country.” Back in 1990, 12 countries had a wealth tax, but they were so difficult to manage and hurt the economy so much that now only 3 exist. Countries are dropping the wealth tax because it doesn’t make sense.

“The government is spending more than it takes in, so at some point … somebody is going to pay more in taxes and I do think that should be done in a progressive fashion,” Gates said.

It’s hard to predict exactly how much candidates will spend on any future election, but it only seems to get more expensive. This year, the political war seems as if it will be even more angry and personal than ever before. The war will be over the estimated 1.2% of U.S. citizens who are largely undecided. According to Frank Luntz, a republican pollster, all the U.S. parties and the candidates will spend as much as $2 billion to reach them.

1.2% can swing a victory in any direction. In the rust belt alone, Michigan and Wisconsin went from being reliable blue states to swinging red. There was very little interest in voting for Hillary Clinton, so the margins in these states were tiny. The year before, these states went handedly towards Democrat Barack Obama, who won his first and second term.

Luntz says that around 6% of U.S. voters are considered “undecided.” The battle is really for them, as both sides know they aren’t going to sway the minds of the real decides. They always vote along party lines, no matter who the candidate is. If the party doesn’t put up an exciting candidate, they would rather stay home than vote for the other side.

Things are more partisan than ever. As a result of President Trump winning in 2016, both Republicans and Democrats seem to have run to their own corners, nearly to the extreme in many cases. Now the Dems are desperate to get Trump out of office for obvious reasons. The Republicans are desperate to keep Trump in office, who is possibly one of the most popular Republican presidents in U.S. history.

Luntz Believes More Money is Needed This Time Around

As stated previously, the real battle is for the small percentage of undecided voters. And all the money is going to go towards convincing them which side is the most moral and better for the country. The Democrats are going to run on getting rid of Trump, while the Republicans will focus on the great economy and play up Trump’s strengths.

“If you’re that undecided now when everybody else has made up their minds, it’s going to be very hard to move you,” Luntz said. “All this money and all this time and all this effort is going to be spent on 6% of the country.”

The election will inevitably come down to how the undecides feel about Trump’s presidency. Not everyone is 100% against him like some hardcore Dems are. Many are “conflicted, the ones that liked aspects of the Trump presidency, but not all of it, or the ones who disliked much of what he’s done.” It’s possible to like what the president has done without liking him as a person.

“I don’t think more money will be spent with more effort and more intensity on a smaller group of people than what will happen in this election,” Luntz said. “Because in the end, if you’re undecided in Texas or California or New York, you don’t matter. So, it’s 6% who are undecided in 20% of the states that could actually move.”

In the end, it’s a race to see who is the least extreme. Will a socialist agenda be the winning strategy for the left, or a more centrist message that grabs the undecideds? This is what the whole election will come down to.