r/WallStreetbetsELITE • u/AlarmedGibbon • 21h ago
Discussion The actual plan
A lot of people are confused about why the current Republican administration would be willing to crash the economy for these dumb tariffs. I've seen Redditors proposing various ideas for what they think is The Plan, trying to get all of this to make sense. They think surely it must make sense somehow because he has people like Musk around him who they think are smart.
Then I've also seen other people saying there is no plan. He just likes feeling powerful, he likes that tariffs are something he can do unilaterally (in truth he actually still needs Congress' consent, but the Republican Congress spread their cheeks for his dick long ago), and that's the extent of it. No plan, just a narcissist and whatever impulses or crazy ideas he wakes up with that morning.
If you look at the current facts and the Republican party's history and ideology, I actually do think there's a plan. It's just not one anybody's currently talking about, not publicly anyway, but it is a plan that has the benefit of making sense given everything we know.
The first thing to understand is this is not happening in a vacuum. As the administration is raising taxes on everyone, particularly the poor and middle class who spend a disproportionate amount of their income on now-tariffed products as compared to the wealthy, they have also been talking in the background about eliminating federal income taxes for people and corporations. Just Google 'eliminating income taxes' and you'll see many recent articles about figures in the administration talking about this. So they effectively want to get rid of income taxes and various other federal taxes and replace that tax revenue with tariff revenue instead.
But here's the thing about tariff revenue - it tends to naturally go down over time. As many have noted, tariffs incentivize domestic production of previously imported goods, which reduces import volume over time and thereby reduces tariff revenue. Another way is that tariffs incentivize smuggling, misclassification of goods, and other forms of evasion that erode the revenue base, especially when combined with reduced government oversight due to layoffs and downsizing. There are more reasons than this but you get the idea. Tariffs by their nature encourage their own dwindling returns.
So we'd be replacing a reliable revenue source that grows over time, income taxes, which even if you leave at the same rate nonetheless grows in dollars with inflation and economic growth, with one that instead dwindles over time and could even all-but disappear eventually.
Which brings us to Republican party ideology and a tactic they pioneered many decades ago known as 'starve the beast'. Google it. In the case of this analogy, the government is the beast. This strategy dates back to the Reagan era. The basic idea is, Americans don't easily give up their government. Eliminating what they call entitlements, your Social Security, your Medicare, that would be politically unpopular, right? But what you can do is, every time you're in office, you lower taxes. And then again. And again. And again. And you never, ever, vote to raise them back up.
So the idea goes, eventually, the government, starved of money, will simply have to downsize, right? Eventually we just won't be able to afford programs like Social Security and Medicare, and the Republicans will take no blame, they'll just say we have no choice but to tighten our belt now. From their perspective, they can finally get the citizens off the government's teat, and they'll probably manage to blame the Democrats for the whole situation to begin with using their right wing media machine. It's a good plan.
But here's the thing. It's been 45 years since they started this plan, and instead of tightening the belt, we've just decided to go further and further into debt instead. The day they pined for, that they long envisioned, has just never come. It probably would eventually come if they kept up this strategy, but it's taking much, much longer than they ever expected, and in the meantime we just keep going deeper into debt.
So now, Trump and his cohorts have found a new strategy. Get us off steady revenue, shift over to a source that's basically disappearing ink, they'll finally collapse the entire federal government and we'll live in the pure corporate oligarchy conservatives have long been trying to move us into. That's the plan. If they have to crash the economy to initiate it, so be it.
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u/MasterCrumb 17h ago edited 17h ago
I think the first part of your analysis is correct. That is, the goal of tariffs is to shift from a progressive tax (income) to a regressive one (tariffs) to shift tax burden from rich to poor people. I also agree that there is a strong drive towards starve the beast.
I am not sure there is much more unified planning about a diminishing return. Plus anyone with planning skills would realize tariffs will restrict the economy and likely cause a political backlash.
Often there are many reasons for things. I wouldn’t discredit the degree racism and nostalgia plays into this. Remember this is a log held belief from Trump because he was working with foreigners (Japanese) and just had a gut feeling that they were ripping us off (all while posting race baiting adds about Central Park 5). There is a real anger that other countries are getting wealthier, and there is a real willingness to accept pain to hurt other countries. The people who I have heard defend this policy really believe that American manufacturing will be higher quality (why?) and well paying (why?) … because of nostalgic views about industrial post war hey day.
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u/Correct-Cat-5308 14h ago
That makes sense, and there is also another part to it - they actually want the rest of the world to be forced to devalue the dollar, so that US foreign debt would be cheaper and US manufacturing more competitive. Which, after the first period of shock, might bring some positive results, but in the long run the results would be negative because of lack of stability and trust.
They might want the production to be in USA for similar reasons as Putin did in Russia - so that if they introduce technofascism, other countries wouldn't have leverage over them. And it looks like they believe they'll soon have plenty of poor people willing to work for even lower wages. Although, I'm not yet sure how do they plan to realize their goals of keeping women home and breeding. One person's income won't be enough to feed a family.
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u/riovtafv 10h ago
Then you bring in what was happening in the post civil war era. The idea of the company store. In basic terms, you earn $100/month from the factory. You then owe the company $75/month for the company owned house you rent. And then the $50/month in groceries gets put on account at the company owned grocery store. In order to quit the job, you have to have found a way to pay off your debt to the company and be ready to move elsewhere the same day you quit. Also expect to be blackballed from getting a job elsewhere. However the company can fire you at any time with your family becoming immediately homeless. If you are fortunate to find another job the old company takes what you or your family earns until the debt is satisfied.
Clearly slavery under a different name.
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u/Reasonable-Joke9408 8h ago
If the world's debt is in dollars , it makes everyone else's debt cheaper when the dollar is devalued.
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u/Lord_Vesuvius2020 14h ago
Yes you’re right about the whole income tax thing. I would also add the “Mar-a-Lago Accord” which is about restructuring the US debt. This scheme would have countries owning a lot of Treasuries to exchange them for 100 year zero coupon bonds. Why would they do this you ask? Well maybe to get a different tariff deal?
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u/ALLCAPITAL 11h ago
People who think Republicans want to keep government functional and take care of the people, are incapable of reading and instead are voting based on some of the most simplistic personal views of their identity. They’re working want to destroy it, they gut and sabotage constantly, then they get to say “Hey look at how it’s not working, don’t taxes suck?” They want every function privatized.
Oligarchy is 100% the goal. We’re actually already there. But it’s not good enough for them, they want more.
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u/zmannz1984 12h ago
I think we are seeing a similar thing to what happened when the soviet union fell. Same people and corruption in control, just under the guise of a free market. We are going to become the company town for a few trillionaires. Time to eat.
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u/Anne_Scythe4444 11h ago
maybe it's all to incentivize smuggling, and payments for smuggling in crypto
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u/cloister_garden 8h ago
Project 2025 is a plan. Oligarchs controlling more and getting richer in exchange for social media influence and cash is a plan. The 45 year Republican plan has been dropped in favor of not getting primaried and padding personal PACs. Trump’s mentality is zero sum game. For him to win, somebody needs to lose. Attention, money, power and ego stroking requires hurting and ultimately screwing over everyone he comes in contact with. The US didn’t tariff because the US made money raising all boats. Trump wants to sink all other boats. Once the magic cheeseburger takes Trump to hell, his plan will disappear. Republicans will be headless and can’t go back to being pro balanced budget, hawks, pro NATO, pro Ukraine, etc. Center left leaders with Democrats will need to clean things up. If the post Trump backlash is big enough, they will go for Medicare for all, make social media accountable, and tax the mother fucking oligarchs until they can’t breathe.
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u/ScotchandRants 11h ago
The real plan is far simpler than you think...
I don’t think Trump has some 4D chess master plan to crash the economy or destroy the federal government for sport. That gives him and the GOP way too much credit.
But I do think there’s a long-running ideological throughline in Republican policy that explains what’s happening: shift the tax burden off wealth and onto labor, and use populist tools like tariffs to do it without calling it what it is.
Tariffs are a stealth tax—one that disproportionately hurts poor and middle-class Americans, while letting the wealthy off the hook. And because they’re framed as “punishing China” or “protecting American jobs,” they’re politically useful. But they don’t actually rebuild industry or create sustainable revenue. They’re just a short-term lever.
Meanwhile, in the background, we keep hearing about replacing income taxes with “Fair Tax” or national sales taxes. These are regressive by design—everyone pays the same rate, but the poor spend a higher percentage of their income just to live. It sounds “fair” but functions like a scam. You pay more, Bezos pays less.
If anything, tariffs + income tax elimination is a bait-and-switch: create a budget shortfall, then offer a solution that just happens to screw over working people.
It’s not a conspiracy—it’s basic supply-side politics with a new mask. And yeah, most people won’t notice until their cost of living skyrockets while billionaires keep stacking yachts.
So no, there isn’t a grand “crash the government” plan. But there is a very real effort to rewrite the tax code in a way that protects accumulated wealth and lets the rest of us fight over crumbs. That’s the plan.
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u/Future_Class3022 14h ago
I wonder how this will affect equities long term. If the Republican are going to fuck everyone over, I at least want to help protect my family by benefitting from this too.
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u/gibbonsgerg 14h ago
Thanks. I’d been coming to the same conclusions.
But if they really do collapse the government via the federal debt, we will be unable to service the debt, then default, crashing the dollar, and killing it as the world currency.
Why won’t that turn us into a third world country? With no infrastructure, and no federal revenue and a destitute populace unable to buy any products, what’s the upside?
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u/n9neteen83 45m ago
That's the conundrum isn't it? You have to crash the dollar hard to make US labor costs competitive vs China, Vietnam, etc
But that would turn USA into a 3rd world economy. And how many decades would it take to rebuild the manufacturing infrastructure? At the same time China will leapfrog 10X in technology
This tariff thing is DOA. No way the middle class / corporate class will allow themselves to give up their cushy way of life.
I think come midterms the Democrats will have easy win if they campaign on status quo neoliberalism
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u/booyaahdrcramer 13h ago
Thank you for your insights., to you and several others here.
I would only like to add that I’ve said no one should really complain about fair trade. Not free trade but fair trade.
But did it have to happen this way? Where is the art of negotiation here. Where has the art of the deal gone. Where has common sense gone to?
There is no magical wand to move car plants that take years to build, overnight. Same thing with other types of manufacturing.
Not realistically possible.
There is no country in the world that can be entirely self sufficient in every respect. Many are ignoring this truth.
Walk/tread softly, and carry a big stick. Get your biggest trade partners to the table (except maybe china which really won’t be super easy) and show the world your skills.
We , the world , does not need to go through the exercise in this fashion to accomplish great things.
Again thanks for the many insights posted here.
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u/Reasonable-Joke9408 8h ago
It is impossible to replace the income tax with tariffs. You would need a near 100% tariff on everything and imports would need to stay at the same level. This all makes no sense (I think the plan is created by clueless idiots) and the only rational explanation is a shock to the economy that allows for a takeover of the US by oligarchs like Post Soviet. Russia.
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u/joshine89 6h ago
it amazing the cognitive dissonance which trump supporters will perform to give him every benefit of the doubt. biden checks his watch when honoring a vet and fox jumps on him for weeks. obama wears a tan suit and they are up in arms. trump crashes the economy and maga supporters come up with stuff like this from the OP. the right wing msm is trying so hard to cope with this. dude ran on world peace, affordability, world wide respect and soaring stock markets... now after the embarrassing meeting with zelinskyy, threats to annex canada, invade greenland and panama, passing a budget which massively increases debt and crashing the stock markets we get this... for some reason he gets every pass, every benefit of doubt which he has not earned.
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u/mondayaccguy 3h ago
OP, Simply put
Nope .
A party that burns the public to the ground pays the toll. Every single time in every single country .
If the repubs stay the course, they are out of power for a generation.
Learn your history , it happens every time
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u/-Apple-iPhone- 21h ago
Too long to finish reading but cool write up about how tariffs will boost the economy. All in calls Monday.
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u/Old-Zucchini-5660 18h ago
Please note, there is no ‘plan’. This is all about ego, trying to settle scores, poor judgement, enjoying playing with people’s lives. An unbelievable act of self harm, makes one wonder.
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u/Head_Importance931 13h ago
Trump is setting the entire country ablaze. There will be nothing left after this term. He’s enacting his revenge on us all, he’s the Devil reincarnated. False prophet to the unintelligible maga cult.
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u/ArcadeT0k3n 14h ago
An end run around changing to a consumption tax, without actually changing tax law and dealing with Congress. It will disproportionately affect low income.
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u/Best-Act4643 13h ago
The U.S. debt is also up for refinancing this summer, so lower rates will save literally billions and billions of dollars. Something that many overlook.
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u/willisthemenace24 12h ago
I think a big part of the plan is to force the Fed to cut rates before 9 trillion in debt needs to be refinanced
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u/AlarmedGibbon 7h ago
I've heard a lot of people talking about that, but it doesn't really make sense when you think about it. Tariffs cause inflation, and inflation actually causes the Fed to raise rates. Even the resulting economic slowdown won't be enough to overcome this. This is why we're getting warned about stagflation, and the only way get stagflation under control is to raise rates higher, which crashes the economy even harder, but this is a necessary evil the Federal Reserve learned during the early Reagan administration, and it's not a lesson they've forgotten I assure you.
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u/surfhack 11h ago
Alternative hypothesis: Step 1: Crash the economy Step 2: Fed has to drop interest rates to stimulate growth, or is pressured to drop rates (see https://truthsocial.com/@realDonaldTrump/posts/114280322706682564) Step 3: Refinance debt at lower rate Step 4: Claim victory because you saved trillions via lower debt payments
The big worry is debt refinancing of those 10 year bonds that are coming off 2014 interest rates. Debt servicing is about to sky rocket raising the deficit. Short term debt you would save on and 10yr you don’t get hit by.
The kink in the plan is inflation. If there is inflation (in this case stagflation) it’s very hard to drop rates.
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u/AlarmedGibbon 6h ago
If this were the plan, you wouldn't do tariffs. Tariffs are the dead giveaway that this is not the plan. Tarifs are remarkably inflationary, because not only do they directly increase the price of tariffed products, but even products with 100% domestic supply chains raise their prices too since they see their competitors raising prices. Then retaliatory tariffs get enacted, we're exporting less, so to make up the loss in volume, companies start raising prices again.
Once this cycle has begun, the Federal Reserve will have no choice but to raise interest rates, and they damn sure aren't going to lower them in the meantime while they see this inflation recipe getting underway.
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u/surfhack 6h ago
The fed won’t be able to raise interest rates because they’ll trigger further declines in the economy by reducing investment. Inflation is just one of the triggers for interest rate changes. Jobless numbers go up, vacuum from reduced government spending, etc. These will have downward pressure on rates. your theory takes years to implement but by then the debt servicing will already have ballooned the deficit.
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u/AlarmedGibbon 6h ago
You need to look at what the Fed did to tackle stagflation in the early 1980s. This is a lesson they've already learned. In a weak economy with high inflation, they chose to raise interest rates. That's the playbook for stagflation.
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u/CrisssV 10h ago
The plan is -> (i) Push investors to treasury bills away from stocks (ii) Force Powell to lower interest rates (iii) Refinance National Debt at lower cost [trillions of debt expiring in 2025] (iv) lower mortgage rates, etc. (vi) negotiate tariff rates with other countries as this happens and get a 'better' deal.
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u/AlarmedGibbon 6h ago
If this were the plan, you wouldn't do tariffs. Tariffs are the dead giveaway that this is not the plan. Tarifs are remarkably inflationary, because not only do they directly increase the price of tariffed products, but even products with 100% domestic supply chains raise their prices too since they see their competitors raising prices. Then retaliatory tariffs get enacted, we're exporting less, so to make up the loss in volume, companies start raising prices again.
Once this cycle has begun, the Federal Reserve will have no choice but to raise interest rates, and they damn sure aren't going to lower them in the meantime while they see this inflation recipe getting underway.
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u/v4bj 4h ago edited 4h ago
Pretty much there are only 2 reasons, one is that Trump wants people to grovel to him and swear fealty for relief. Two is that Trump lives in this 50s fantasy where America made everything and women and minorities knew their place. Only problem is that disengaging from the world never turns out well. China itself tried this in the 1600s and went from being one of the richest nations to being one of the poorest. And it took 400 years to fix.
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u/ctzn2000 2h ago
Trump's business is real estate. Tarriffs on materials will make it more expensive to build competing towers and condos. Trump's existing real estate holdings will increase in value from tarrifs as they are already built. He and his family will be richer.
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u/Typical-Breakfast-17 11h ago
Social security pays for itself and republicans still claim that its broken. Anything so that the billionaires don’t have to pay their fair share
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u/crunchycode 11h ago
As far as Trump's motivations go for him personally, I am in the "narcissist" camp. This "plan" is nothing more than what it appears to be on its face. The simple and frightening truth is that Trump is an idiot and is driven primarily by ego. Trump's psychology is actually pretty simple: "I have to be on top.". In Trump's view, America is the "best", and he is the American President. It pisses him off that other countries are "taking advantage" of America by selling more to us than we are selling to them - trade deficits. Therefore, he wants to squash these trade deficits and make America be on top, where we sell more to them than they sell to us - making all other countries our vassals. Its all about power, which is evil in itself, but also being done in the most childish stupid way.
When you understand Trump's simpleton psychology, the explanation for all of his crazy behavior becomes much easier. Trump has no ulterior motive or vision for America other than to get everyone in the world to bow to him.
Now, his enablers - that's a different story. I think that yes - they do want to starve the beast and have the long con going on. However, I don't think they handed Trump this plan as part of that. I think this is driven primarily by Trump and his malice.
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u/Anne_Scythe4444 11h ago
i think he's either a russian asset or a dumbass. which is more dangerous and what should be done?
russian asset is more dangerous, and what should be done is: you should look for an influx of russian agents into the u.s., because the ultimate plan would be some sort of takeover, assisted by plain clothes agents on the ground, inserted beforehand, who would start threatening/intimidating/taking down people behind the scenes and effecting certain events later on.
as a dumbass: this is less dangerous, but, it's more unpredictable, and easily has the potential of becoming more dangerous depending on how events go.
what should be done: hopefully let nature do it's work on a scale of easy-hard:
easy: he gets impeached for causing economic chaos
or, dems retake house/senate and start reversing course
hard: at some point a stand needs to get made by a crowd against a third term or maybe earlier against unforeseen events unfolding. like, what if he starts a real war with a major partner. you would want to stop that stuff immediately.
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u/nbarsotti 8h ago
The plan is to make US corporations and foreign leaders come grovel at the feet of Trump to plead for tariff relief. If the vassal can enhance Trump’s wealth and power with a deal they will get tarrif relief. The plan is simple, power and greed.
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u/Head_Importance931 13h ago
We that aren’t mega wealthy are screwed. T-Rump is a Tri-Polar maniac only determined to direct hatred back toward his electorate.
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u/Huntersteele69 19h ago
Not sure if that's the plan but if we left the status quo and the the democrats waste money there won't be a America left in the future since debt will kill us like it is not already.
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u/stargazer2020s 19h ago
Fascinating. Thanks so much. First thing I have heard that actually makes sense