Last week, we asked an important question about Trump’s tax reform plan: Can it deliver?
Despite rampant optimism about tax reform, there are a number of problems. In the first place, it remains uncertain whether or not Congress can even get anything done. Second, as Peter Schiff pointed out, the plan as presented won’t likely create the economic growth it promises.
Peter focused on the fact that the plan isn’t truly reform. It’s tax cuts masquerading as reform. Then there is the issue that it promises to decrease revenue without actually cutting spending and shrinking the size of government. There is strong evidence showing high debt levels retard economic growth.
In a recent article published on the Mises Wire, economist Frank Shostak explains precisely why cutting taxes without accompanying decreases in government spending won’t spur economic growth over the long-term.
Speculation continues to swirl around the question of who President Trump will appoint as Federal Reserve Chair when Janet Yellen’s term comes to an end in February.
Trump will reportedly meet with Yellen this week to discuss the possibility of her staying on as the head of the central bank. During the presidential campaign, Trump was highly critical of Yellen, saying she is “obviously political,” and accusing her of “doing what Obama wants her to do.”
Obamacare repeal 3.0 went down in flames Tuesday. According to Bloomberg, opposition from three Republican Senators derailed the latest attempt to dismantle the Affordable Care Act.
Leaders decided the Senate won’t vote before Saturday’s deadline to use a fast-track procedure to keep Democrats from blocking a GOP-only bill. On Monday, Republican Senator Susan Collins of Maine added her opposition to that of GOP Senators John McCain of Arizona and Rand Paul of Kentucky, enough to sink the legislation in the 52-48 Senate.”
This raises broader questions: Can Republicans get anything done? Is there any chance of Trump pushing through his ambitious economic agenda?
The economy is essentially the same as it was under President Obama. The big difference is how President Trump is spinning it.
During a recent interview, Joe Rogan interspersed Peter Schiff’s comments with clips of Trump before and after the election. The resulting video vividly illustrates the difference between Trump the candidate and Trump the president. Peter said candidate Trump was telling the truth.
That’s what’s really bothering me about Trump is the hypocrisy, because when Trump was a candidate and he got elected because by and large he told the truth about the phony nature of the recovery. Obama was out there talking about how great things were, and Trump was like BS, it’s not that great.”
When we consider geopolitical risk, we tend to focus on things that are “out there.” We might think of military tensions between the US and North Korea, or war in the Middle East, or Brexit. But more and more, analysts are looking to the US as a significant source of geopolitical risk.
Bridgewater Associates founder Ray Dalio said investors should buy gold.
Bridgewater manages about $160 billion in assets according to its website, and ranks as the worlds largest hedge fund.
In a LinkedIn post, Dalio wrote, “prospective risks are now rising and do not appear appropriately priced in.” He specifically cited geopolitical tensions, especially the war of words between North Korea and the United states, and the looming deadline for Congress to raise the debt ceiling.
For the last several weeks, Peter Schiff has been saying President Trump is making a mistake by taking credit for the surging stock market because fundamentals don’t support the bull run. He’s warned that the president has set himself up and the Federal Reserve will use him as the fall-guy when the inevitable crash comes.
On Tuesday, Peter took the message onto Fox Business and faced off against former Trump campaign operative Steve Cortes. Fireworks erupted when Peter said Trump looks like a hypocrite when he tries to take credit for an improving economy.
The Dow cracked 22,000 this week, marking the third 1,000-point milestone in 2017. The Dow industrials are up 20% since election day.
In fact, Pres. Trump is taking credit for the rise. As the Dow approached the 22,000 mark, the president tweeted that the market has gone up 4,000 points since his election.
In his most recent podcast, Peter Schiff once again points out that the economic fundamentals don’t support this stock market bull run, saying there are cracks in the foundation.
The dollar plunged after Republicans in Congress abandoned their plan to overhaul Obamacare this week.
The plan to “repeal and replace” the Affordable Care Act collapsed after Senators Mike Lee and Jerry Moran joined fellow Republicans Susan Collins and Rand Paul opposing it. In fact, “repeal and replace” was a misnomer. The Republican plan kept many key elements of Obamcare in place. It was more of a Republican revamp than any kind of repeal.
Nevertheless, pundits and analysts widely viewed the failure to get healthcare reform done a major stumble for Republicans, and it seems to cast doubt on the Pres. Trump’s ability to advance his ambitious economic agenda. Reuters put it this way: