During a recent interview with Investing News Network, Peter Schiff reiterated something he’s been saying for the last several months. The stock market is still a big, fat, ugly bubble, and misplaced optimism continues to blow it up.
[Pres Trump has] accomplished blowing more air into a stock market bubble that already existed before he was elected, as he rightly identified the market as a bubble as a candidate. But you know, his policies have not altered that. In fact, he’s now championing the stock market. He’s the biggest booster. He’s actually claiming credit for the market rising. And I do believe that part of the fuel that has caused the bubble to get bigger is the enthusiasm that Trump will reduce taxes and that these taxes will mean more corporate earnings – certainly after-tax earnings because they cut the taxes – a more robust economy, more growth. And so there’s a lot of optimism. But I think the optimism is misplaced because I believe the added deficits that will result from the tax cuts and the increased government spending will do more harm to the economy than whatever benefit we get from paying lower taxes.”
Some mainstream analysts agree with Peter, warning that the Republican tax cut proposal will balloon the deficit, minimizing its positive economic impact.
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.
When Pres. Trump signed a bill raising the debt ceiling limit for the next three months, it instantly added approximately $318 billion to the national debt, raising it to $20.16 trillion. And Trump wants to do away with the debt ceiling altogether.
It’s hard to even conceptualize $20 trillion. What does that mean to the average person? Just the Facts Daily put together some interesting data that helps put the soaring national debt into perspective.
