In all of the talk about tax reform, nobody is considering the more fundamental problem facing America – the size and scope of the federal government.
Peter Schiff has described the Republican tax plan as “tax cuts masquerading as reform.” When it’s all said and done, Americans aren’t going to get tax relief. They are going to get big government on a credit card. The balance will come due down the road.
The real issue is the total cost of government. In an article originally published on the Mises Wire, Ryan McMaken argues that if Republicans really want to ease the burden of government, they need to cut spending.
The middle class is not getting tax relief under the Senate plan currently under consideration. It’s getting big government on a credit card.
Here’s a fun fact. Did you know virtually all of the individual tax cuts in the Senate version of tax reform are temporary?
Indeed, what the Senate giveth, it also taketh away. Most of the tax cuts for individuals would expire in 2026 under the Senate plan.
So what’s the reasoning behind sunsetting the tax cuts?
So what are we to make of the continuing stock market climb?
Peter Schiff summed it up succinctly in a recent interview on Fox Business.
Well look, I think it’s a bubble.”
Americans are spending money, but it appears they are dipping into their savings to do it.
According to data released by the US Bureau of Economic Analysis, savings last month fell to a level not seen since 2007. The 3.1% rate in September was the lowest since it dipped to 3.0% in December 2007.
In his most recent podcast, Peter Schiff reminded us of what was going on in late 2007.
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.”
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.
Debt in the US is the mother of all bubbles.
The US government is more than $20 trillion in debt, with actual unfunded liabilities pushing far higher. Meanwhile, American families have amassed more than $1 trillion in credit card debt alone.
During a speech at Cambridge House IMWC earlier this summer, Peter Schiff discussed the massive levels of government, corporate, and personal debt in the US and how it will eventually take the air out of America’s bubble economy.
Peter starts the speech by showing the economy isn’t nearly as great as the mainstream pundits claim. He highlights the massive levels of debt, how the government manipulates employment numbers, and the very real problem of inflation. Then he shows how Federal Reserve policy has gotten us into this predicament and the choice it will ultimately be forced to make. Peter says in the end, the Fed will sacrifice the dollar.
Pundits and government officials keep telling us the economy is strong. Everything is great. After all, GDP is growing.
But a lot of people recognize things aren’t all that great. Some prominent economic analysts have said a major crash is looming. Nobel Prize winning economist Robert Shiller called stock market valuations “concerning” and hinted that markets could be set up for a crash. Several other notable economists have recently expressed concern about surging stock markets, particularly in the US. Marc Faber has predicted “massive” asset price deflation – possibly of a drop of as much as 40% in stock market value. Billionaire investor Paul Singer recently said the financial system is not sound. And former Ronald Reagan budget director David Stockman said we should get ready of “fiscal chaos.”
So, how is it that some see a meltdown on the horizon while most of the mainstream sees nothing but unicorns and roses? If the economy is growing, how can anybody things recession is right around the corner?
Well, what if the mainstream doesn’t understand a recession?