Your Trump tax cut isn’t going to be quite as big as you might have thought.
According to a report by the Wall Street Journal, a new inflation measurement included in the GOP plan and recently implemented by the IRS will cut into your tax cut savings in 2019.
Ron Paul warned you about this during the debate over the tax cuts.
Well, the midterm elections are finally over. The Republicans managed to hold on to the U.S. Senate, but the Democrats took control of the House. The “Blue Wave” was more like a “Blue Ripple.” To me, it smells a lot like gridlock, which is generally good news if you’re a person who favors smaller government. Gridlock means very little will actually get done in Washington D.C. The government not doing anything – well, that doesn’t sound so bad.
But in his most recent podcast, Peter Schiff brought up a potential problem with a divided government. We will likely end up with even higher budget deficits.
As Peter Schiff put it in a Facebook post, Trump promised to drain the swamp, but today, “The swamp is now bigger and more expensive than ever!”
The US government spent a record $433.3 billion last month, running up a monthly deficit of $214 billion, according to data released by the US Treasury Department.
That’s $433 BILLION spent in a single month.
It was interesting watching people on the left side of the political spectrum become practically giddy as the stock market tanked on Monday. It seems they couldn’t wait to pin the collapse on Donald Trump.
Of course, the president has set himself up to take the fall by constantly taking credit for this bubble economy. But as Peter said during an interview with Stock Pulse during the Vancouver Resouce Investment Conference. the only thing you can blame Trump and the Republicans for is doing what everybody else did – pretend government can give Americans a free lunch.
Peter Schiff recently attended the Vancouver Resource Investment Conference. While he was there, he did an interview with Daniela Cambone of Kitco News.
Peter and Cambone talked gold, and Peter said he thinks the yellow metal is set to soar, despite the sentiment that Federal Reserve Rate hikes will hold gold down.
Gold has not really rallied. It’s been going up, right? But it’s been creeping higher. Now, everybody expected it to fall. Everybody believed that as soon as the Fed hiked rates, gold’s gonna tank. And it didn’t tank. It rallied.”
As we’ve reported, the US government is spending money like a drunken sailor. But nobody really seems to care.
Since Nov. 8, the US national debt has risen $1 trillion. Meanwhile, the Russell 2000 (a small-cap stock market index) has risen by 30%. Former Reagan budget director David Stockman said this makes no sense in a rational world, and he thinks the FY 2019 is going to sink the casino.
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.
Harry Dent is a long-time gold bear. He used to say gold would fall to $250. He’s revised that prediction up a bit, but still calls for a steep decline in the price of the yellow metal – perhaps to as low as $700.
Peter Schiff took on this notion during a recent interview on RT’s Boom Bust and explained why he thinks Harry is wrong.
The bottom line is Dent has too much faith in the US dollar.
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.
After some gains last week, the dollar has shown weakness in recent days. In his most recent podcast, Peter Schiff said he thinks part of the dollar weakness is because the reality is starting to set in when it comes to tax cuts.
In the first place, it remains uncertain whether or not Congress can even get anything done. Obamacare repeal 3.0 went down in flames last month, and Republicans have shown few signs of being able to come together to pass significant legislation such as tax reform.
But as Peter pointed out, there is a more fundamental problem with the Trump tax cut proposal.
