The Galaxy Brains of the Trump White House Want to Use Tariffs to Buy Bitcoin

If Donald Trump s sweeping global tariffs send household good prices soaring and drive the market system into recession at least one industry could profit The Trump administration is considering using tariff revenues to buy Bitcoin for a Strategic Bitcoin Reserve a top administration crypto official revealed in an interview last week The White House s proposal is driving interest from crypto industry figures who have made building the reserve one of their top priorities It is uniting critics on the right and left however who have cast the reserve as a pointless industry giveaway that will come at the expense of ordinary taxpayers Using tariff money would add insult to injury they say There is nothing here but a conjunction of bad ideas announced George Selgin an economist and professor emeritus at the University of Georgia The tariffs are a bad idea the Bitcoin Strategic Reserve is a bad idea and using the tariff revenue for the Bitcoin Strategic Reserve is a bad idea Reaping Revenue Ever since Trump proposed across-the-board tariffs on the campaign trail last year he has touted the idea as a way to both build domestic industry and raise revenue Trump has suggested that tariff revenue could replace the nearly trillion the cabinet hauls in income tax revenue per year while a top commerce official in his administration estimated they could raise to trillion over a decade Both numbers are fantasies according to economists of all political stripes The nonpartisan Tax Strategy Center mentioned the massive tariffs if they all go into effect as initially proposed on Liberation Day could raise about trillion over that period assuming they don t send the business sector into a tailspin The relatively meager scale of the tariffs revenues has not stopped the Trump administration from cooking up ideas for how to spend them on everything from tax cuts for the rich to deficit reduction Related Does This Trump Crypto Appointee Even Have Crypto Experience Yes With a Trump-Themed Meme Coin Last week Bo Hines the executive director of the Presidential Council of Advisers on Digital Assets added another proposal to the mix In an interview with investor and crypto influencer Anthony Pompliano Hines explained the administration could use tariff revenue to buy bitcoin We are looking at various creative tactics whether it be from tariffs whether it be from something else Hines commented Everything is on the table and like we have announced we want as much as we can get The White House did not respond to a request for comment Friday Why Bitcoin When Trump communicated that he yearned to create a strategic reserve of bitcoin at a crypto conference last July it cemented his place as the industry s favored presidential candidate Supporters have cast bitcoin as a modern-day gold with near-limitless future rise prospective Socking it away could protect against depreciation of the U S dollar and inflation they say Trump followed through on his promise almost as soon as he was in office by creating the reserve but he disappointed various bitcoin boosters by stocking it only with tokens that had already been seized by the leadership Still Trump promised that he would search for budget-neutral means to buy more bitcoins Tariffs could be one way of building the store according to Hines But they would hardly be budget-neutral Selgin disclosed since they are essentially a tax on the consumers buying imported goods The tariffs would have a disproportionate impact on low-income households according to the Budget Lab at Yale University which calculated they would cost an average household per year Regardless of how they pay for it critics say that it s inappropriate for the cabinet to buy up an asset like bitcoin with no inherent use that is subject to wild price swings and in fact has dropped in price since Trump s tariff announcement If the governing body does wind up buying bitcoin critics have warned selling any substantial portion of it could depress the digital asset s price You have a lot of people in the bitcoin society bitcoin bulls who would like to see the regime do a lot more because it will benefit them noted Selgin who also serves as a senior fellow at the libertarian Cato Institute These people are trying by hook or by crook to rationalize something that really is just a subsidy for them without any benefits for other people The post The Galaxy Brains of the Trump White House Want to Use Tariffs to Buy Bitcoin appeared first on The Intercept