“Send the government on vacation for 6 months, tell’m, you can get your paychecks just do nothing for 6 months’ and watch this economy come roaring back.” – Steve Forbes
Mr. Biden is wrong to think huge tax increases and big government spending will continue to fuel a strong economy.
Just the opposite, the economy was doing well going into when the Biden administration took office. President Trumps (45) vaccination program, a miracle, was happening. States, even Blue ones, are starting to back down from their lockdowns. And that is why the economy is roaring.
The big potential headwinds to the economy are the big tax increases, the big spending, which means inflation and higher interest rates, wrecking America’s energy independence by going after Crude Oil and Nat Gas and putting on mass anit-business regulations. All these things are will harm the economy.
Steve Forbes credits President Trump (45) for teeing up a robust economy for Mr.Biden.
“The rescue plan was put in by Trump, and the de-rescue plan is what Joe Biden is proposing: big taxes, big spending big regulation. Never worked before, ain’t going to work now.”
On the Consumer Price Index
“What’s happening here is that the Federal Reserve is printing too much money,” Mr. Forbes said. “That is devaluing the dollar. You’re starting to see the gold price starting to move up, that’s an indication. Commodity prices are soaring, that’s another indication. The frothiness in some of the markets, you’re seeing it in the cryptocurrencies.
“So, there’s a lot of cash out there and there’s not a lot of confidence at the end of the day that the Federal Reserve is going to be able to handle it.”
Mr. Forbes said there is a big difference between the present situation and when the Fed printed money in Ys 2008-09, when USDs were put in “a deep freeze” and held while the government paid interest to banks.
This money now is going into the economy, and that is a Key reason why prices are rising, and why interest rates are going to be going up, and the reason for trouble down the road. And, know what? The crowd will blame Donald Trump when that trouble hits.
On the Fed’s approach to interest rates.
“There’s a new crazy theory out there called ‘Monetary Theory,'” Mr. Forbes says. “It’s one that the Biden administration is clutching to.
“That’s the idea: ‘Money does not matter anymore.’ If you want something in government, you just say, ‘Bring it to me, I’ll print the money, and there’ll be no consequences.’ It ignores 4,000 years if history when you do that nonsense.”
He added the Fed still adheres to the antiquated Phillips curve, which states that inflation and unemployment have a stable and inverse relationship.
“They believe that if you want lower unemployment you have to have higher inflation, and if you want low inflation, you have to high unemployment,” he said. “That is a preposterous theory, but it is one that the Federal Reserve worships these days – has for years.”
On inflation: Mr. Forbes insists current inflation is higher than the 2.6% for March.
“You ask anyone who goes to a gas pump, anyone who goes to a supermarket anyone who buys lumber, anyone who buys copper can see that in the real world the prices are going up at a much faster pace,” he says.
“The government is mucking it up. They should have a stable dollar, but they think a cheap dollar is the way to prosperity. We should have learned from the ’70s, that that leads to big trouble.”
Mr. Forbes has a simple solution is to send government on hiatus for 6 months and all will turn out good..
Have a healthy day, Keep the Faith!