Now that Donald Trump is the 45th president of the United States, one former Reagan advisor believes the billionaire real estate mogul will entrench the nation into an economic disaster.
Telling the Fox Business Network on Thursday, David Stockman, the Reagan budget director, explained that Trump already has the deck stacked against him because of what he is inheriting from his predecessor: a big fat bubble.
“In effect he is inheriting a very bad hand of bubble finance from the Fed and massive debt on the fiscal front. I don’t think the Trump administration is even halfway prepared for the monsters that they’re going to confront that are in this deep swamp in Washington,” Stockman stated.
One of Trump’s first acts in the Oval Office, Stockman suggests, is to demand the resignation of Federal Reserve Chair Janet Yellen, something that Steve Forbes recently recommended to the president.
“I think he should demand Janet Yellen resign right now, and set up the Fed to take the fall because they created this massive bubble in the first place,” he said. “Do what Reagan did. He blamed Jimmy Carter. He blamed his predecessors for the mess.”
Although he does believe that the Trump administration will succeed in slashing the corporate tax rate to 20 percent, Stockman does think that it will be a little bit harder on the individual tax break front. He urged the president to slash the payroll tax because “it’s killing jobs,” noting that he could replace it with a consumption tax.
“We need tax reform. U.S. tax rates are too high. It penalizes our ability to be competitive in the world economy. I think with tax reform, most people will find over time, they get more in their paychecks,” Stockman said.
With that being said, Stockman does explain that the United States government has to pay for the tax cuts somehow without expanding deficits and going too much into debt. He listed import tariffs, export rebates or spending cuts as some of the solutions.
A few of Stockman’s comments are surprising because if you read “The Great Deformation” then you would know that he is a sage in economics.
Tariffs will only hurt American workers and consumers, and a consumption tax is evil since it is a tax on living. Moreover, tax reform is a scam, as legendary free market economist Murray Rothbard espoused years ago:
“The policy conclusions that flow from our analysis are diametrically opposed to those of the flat taxers. In looking at the history of reform and at the arguments of the flat taxers, one can almost sympathize with Richard L. Doernberg, professor of law at Emory University, who throws up his hands and concludes that ‘We have a lousy system; let’s leave it alone or it will get worse.’ Doernberg urges that the current tax code, as bad as it is, should remain precisely the way it is forever, so that at least people will know the score and be able to plan around its provisions.
“But we can do better than that. We have to look differently at taxation. We have to stop looking at taxes as a mighty system for achieving social goals, which merely needs to be made “fair” and rational in order to usher in Utopia. We have to start looking at taxation as a vast system of robbery and oppression, by which some people are enabled to live coercively and parasitically at the expense of others. We must realize that from the point of view of justice or of economic prosperity, the less people are taxed, the better. That is why we should rejoice at every new loophole, new credit, new manifestation of the “underground” economy. The Soviet Union can produce or work only to the extent that individuals are able to avoid the myriad of controls, taxes, and regulations. The same is true of most Third World countries, and the same is increasingly true of us. Every economic activity that escapes taxes and controls is not only a blow for freedom and property rights; it is also one more instance of a free flow of productive energy getting out from under parasitic repression.
“That is why we should welcome every new loophole, shelter, credit, or exemption, and work, not to shut them down but to expand them to include everyone else, including ourselves.”
It seems like Rand Paul and a couple of other Republican lawmakers will be the only ones to hold Trump’s feet to the fire on fiscal sanity, though the president won’t care whatsoever what others say. He didn’t the entire campaign so why would he now?
“End the Fed” should be on The People’s tounge’s at every moment of the day.
They should increase their own means of personal trade and barter.
Yes the new Admin should attack those who devised this continual calamity over the years, and the People should back it with the facts of the Greatest Lie ever perpetrated.