I'm John Bachelor with my colleague Professor Richard Epstein, teaches at NYU and the University of Chicago Law.

Also for the Civitas Institute, he publishes his reflections on tariffs.

Low tariffs lead to higher levels of domestic consumption and greater success in export markets

as the cheaper inputs lead to lower export prices.

All right, Richard, that's inarguable.

So given that statement, what is Washington up to?

What are they thinking?

What they're doing is they're preoccupied with deficit.

And deficits tell you very little.

And the best way I think to understand this is I'll give you just a little homely example.

You have two people, me and you.

And it turns out that what happens is you only sell to me and I only buy from you.

So if you look at this situation, it's an imbalance in the economy, right?

Because one of us is the debtor and one of those is credited.

But that's not the way to look at it.

Look at both of these transactions and ask the following question.

Do the first question transaction make us better all?

Well, John, you're a very astute buyer.

Another very astute seller. The answer is yes. What about the second one? Same answer.

And so the question is, if in fact both parties benefit from these transactions and the economy

expanded, why isn't we worried about the fact that I paid you and you didn't pay me?

All these accounts eventually borrowed out because I may be paying you for stock

...