WASHINGTON / LONDON (IT BOLTWISE) – The debate over U.S. debt policy is heating up as Kevin Hassett and Scott Bessent offer differing views on the effectiveness of tariffs in reducing the national debt. While Hassett sees tariffs as an important contribution to deficit reduction, Bessent warns of their long-term ineffectiveness.
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In the current debate about US debt policy, two prominent voices face each other: Kevin Hassett, Director of the National Economic Council, and Scott Bessent, Treasury Secretary. Hassett argues that tariffs imposed by President Donald Trump play a significant role in reducing the national debt. He emphasizes that revenue from tariffs and the government’s spending discipline are leading to a reduction in the deficit.
In contrast, Bessent sees tariff revenues as a kind of “melting ice cube” that does not provide a lasting solution to the U.S. fiscal challenges. He points to estimates from the Congressional Budget Office that show national debt savings fell by $1 trillion between August and November. This is due to trade agreements that have resulted in a lower effective tariff rate.
The debate is further fueled by the impending decision by the Supreme Court, which must consider whether Trump exceeded his authority by using the International Emergency Economic Powers Act of 1977. Bessent warns that lifting tariffs would be a setback for the government and the American people, while Hassett defends the need for tariffs as a response to decades of trade deficits and their social impact.
Hassett is optimistic that tariffs can promote long-term economic growth and broaden the tax base. He points out that the tariffs are not inflationary, but rather represent a one-time price shock. This view is shared by Bessent, who, however, emphasizes that the main goal of tariffs is to restore trade balance and build domestic production, not to permanently finance the government.
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