Peter Schiff: Republicans Offer Free Lunch Then Stick Us With the Bill (Video)
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.
The irony of it is if you look at the last 10 years of economic growth, the economy actually grew slower than it did during the depression if you aggregate it. So, we’ve kind of been in a slow-rolling depression for a while. The thing is, Trump hasn’t changed that. It’s actually going to get worse, and it’s not Trump’s fault, other than the fact that he’s simply doing what everybody else did. So, it’s his fault in that he’s just doing more of the same, but he’s going to get the blame for it because the voters are going to think that something has changed under Trump, because they’re going to think, well, he’s cut taxes and he screwed the economy up. But the economy was screwed up before he was elected.”
The problem is, Trump has run around saying everything is great. As a result, he owns the bubble economy and the bubble stock market, even though he didn’t create it.
All the problems that he criticized as a candidate, somehow they’re all gone. Everything is great. All of a sudden the unemployment numbers are legitimate. They were fake when he was running for office. Now all of a sudden we’re supposed to believe them just because he is the president. But we are headed for a major economic crisis. It will make the 2008 financial crisis look like a Sunday School picnic. The similarity will be capitalism will get the blame, just like it did the last time.”
Peter noted Bush got the blame for the 2008 crash, even though it was really Alan Greenspan who created the problem. In the same way, Ben Bernanke and Janet Yellen inflated the post-financial crisis bubble we have today. But Trump inherited it and he’ll get the blame when it pops.
Remember, you want to under-promise and over-deliver. Trump has over-promised and he’s going to deliver nothing. He’s going to deliver pain and misery to so many people who voted for him.”
So, what should Trump have done?
What I would have done if I was elected president – I would have leveled with the American public on inauguration day. I would have said, ‘Look, this economy is a mess. Here’s how it’s been screwed up by central bankers and big government. And you know what? We need to bite the bullet. We can’t kick the can down the road anymore. We have to swallow some bitter tasting medicine. But if we do the right things, then America can be great again.'”
Peter said ultimately, we have to recreate the free market economy that made America great in the first place. That means government relief, not just tax relief. It means learning how to save and work instead of borrow and spend. But Peter said Trump shows no inclination to move in that direction.
He is so caught up in this bubble now in the stock market. He’s branded it … The stock market has a big ‘T’ on it for Trump, like one of his buildings.”
Of course, the issue of the tax cuts came up as a positive move by the president and the GOP. Peter jumped all over that.
But you can’t cut taxes and not cut government spending because taxes pay for government … In fact under the Trump administration, the government is getting bigger. So, they’re increasing the size of government and the amount of government spending, and they’re reducing the taxes. How is that government going to be paid for? It has to be paid for. So, the government is going to pay for it by creating debt and creating inflation. And the truth is that paying for government with debt and inflation is more expensive than current taxation. So, all of the people who are getting a tax cut are really getting a bill. We’re just putting this government on a credit card. And when you put things on a credit card, you don’t get it for free. It’s actually more expensive because now you have to make the interest payments. So, this is not something for nothing … You can’t have all the government and then just cut the taxes. That’s the Republican’s version of a free lunch. And there is no free lunch.”
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