‘Liberation Day’ Marks America's Slide Towards Irrelevance
With new tariffs, slowing economic growth, chaos in government, and a debt ceiling crisis looming, America is being isolated in ways that most serve Vladimir Putin.
Today, President Trump is expected to announce a sweeping set of tariffs designed to punish all countries that trade with the United States. These tariffs will come on top of various other sector-specific, country-specific, and reciprocal tariffs already in place. The administration's stated hope is that, somehow, these tariffs will generate massive amounts of revenue for the federal government, thus helping to offset the budget deficit and even potentially reduce reliance on income tax revenue in the future.
This is, of course, idiotic: these tariffs, if left in place, will dramatically shift flows of trade and are also likely to spark inflation and warp markets in unpredictable ways. They will also drive much of the rest of the world closer to China, Russia, and the rest of the BRICS bloc, while leaving America isolated and as a power in decline. If trade is a way to project power globally, these tariffs ensure that we'll be doing a lot less of it; this is how to kill trade, not profit from it. It's a recipe for de-growth and ultimate irrelevance.
But Liberation Day, as Trump is calling April 2 (which he intends to celebrate as a holiday in the future) is just the opening act. We have many more indignities to look forward to.
The Federal Reserve is already seeing signs of “stagflation,” a combination of inflation, uncertainty, and stagnant growth. Analyst Claudia Sahm is quick to point out that this stagflationary climate is different from what we faced in the 1970's, saying “Tariff-induced inflation has a better chance of being “transitory” since the demand destruction from lower real incomes should blunt some of the inflation. That’s little comfort. Stagflation, even if modest, would be costly.” The Fed has accordingly lowered its growth forecast to 1.7% from 2.1%, indicating softening confidence.
The Congressional Budget Office, which tracks government finances for Congress, estimated this past week that we would reach the statutorily imposed X-Date, or date of actual default, for the debt ceiling sometime in August or September, consistent with prior estimates. However, that date could arrive sooner if tax revenues are softer than expected. The Washington Post has reported that the Internal Revenue Service expects as much as a 10% drop in tax revenue as a result of cuts made by Elon Musk's Department of Government Efficiency (DOGE). Analysts believe taxpayers may decline to pay taxes on time in response to staff cuts, which may result in both less filing assistance and enforcement.
In the wake of Signalgate and now ‘Liberation Day,’ it's difficult to imagine Congress handling the debt ceiling situation responsibly in the coming months. And as we have reported previously, strategic US debt default may well be the next phase of our so-called liberation.
The Trump-Musk administration is, as predicted, oriented around solving problems for Vladimir Putin. For Putin, there is no problem bigger than the US dollar, dollar hegemony, and the Federal Reserve. It underpins all of his conspiratorial gripes about the “Golden Billion” that he believes runs the world at Russia's expense.
Tariffs solve one half of Putin's problem by totally isolating the United States and kneecapping a major source of both soft and hard power — trade. Debt default would seal the deal, sending the US into a $15 trillion tailspin of increased borrowing costs and maximum uncertainty.
Of course, the budget will need to be renegotiated by September 30, when the Continuing Resolution passed last month expires. That will be either at about the same time as the debt ceiling crisis, or slightly after. Either way, it's reasonable to wonder how these negotiations will be managed.
Will Elon Musk serve as unofficial (and unelected) House Whip, corralling members of Congress into Signal chats of his own? Will Mike Johnson, who has reported no bank account on his ethics filings, obey the wishes of his Russian donors at American Ethane? Will JD Vance weigh in with warnings not to ignore the wishes of President Putin? All of this will be happening perhaps four or five months into destructive tariffs, market declines, increased inflation — and potentially, martial law.
On January 20, 2025, Trump signed an executive order requiring the Secretary of Defense and the Secretary of Homeland Security to, within 90 days, submit to the president a report “about the conditions at the southern border of the United States.” This will fall on April 20, 2025 (which also happens to be Hitler's birthday, weed day, and Musk's favorite date, for those who care).
Many analysts thus expect that Trump will invoke the insurrection act on April 20, which could also lead to the imposition of martial law. In practical terms, that would likely be limited to a specific geographical incident or localized uprising. But if economic conditions continue to worsen under tariffs and increased economic uncertainty, widespread unrest could unfold later this year, which may provide Trump with justification for more extreme measures.
The price of gold keeps going up, hitting record levels at over $3,100 per ounce this week — an indicator that markets are not comfortable with current policies, and also that central banks are strengthening their balance sheets with hard assets.
This is a self-imposed era of American decline. No one is coming to save us. Tariffs are not magic — no matter what White House Press Secretary Karoline Leavitt may say.
We are witnessing the controlled demolition of the United States as a world power. We may survive it — when we ultimately decide to take action. But first we must suffer the humiliation that comes with having voted for a Putin puppet. Not only did we do that, but we are now being forced to live out the reality of having done that.
Now is our time in the barrel. ■
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Dave Troy
Dave Troy
Dave Troy
