Stockman: ‘Trump Is Walking into a Miserable Trap’ in Taking Ownership of the Economy
RUSH TRANSCRIPT:
CAVUTO: "The tax bill is really the dark cloud that hangs over the capitol. He sell it as middle class tax cut. 86 American middle class families will pay more in taxes as a result of this bill. Neil: You know for the life of me I don't think a right or left position, I don't know where she gets 86 million will pay more. I assume she is talking 10-year horizon, five years, some credit 10. It is possible at that point it is more than they paid on fourth year, net-net, everybody 95% will pay less. The dark cloud for my next guest isn't who gets what, it is the fact we can't afford to do any of this, between tax cuts we can't pay for and spending we really can't pay for. Both parties are complicit. David Stockman, former budget director, David, good to see you."
STOCKMAN: "Grad to be here."
CAVUTO: "The president should be crowing about the tax cuts, should he?"
STOCKMAN: "Absolutely not. He is in the midst of one of the most irresponsible spruce of spending, tax cutting and borrowing in recorded history. Next year there is going to be a 1.2 trillion deficit, the 10th year of a recovery that at a point that will exceed any business cycle expansion we have ever had in history. It is bad enough when you have a huge trillion dollar deficit at the bottom of the recession, but after 10 years of recovery, that is all she wrote. We're heading for the next recession one of these days, an they're piling on the debt with red ink like no tomorrow. This tax cut should have been paid for with spending cuts, if you wanted to have it and they didn't do it. Now at same time we have the fed finally shutting down the printing press and they're going to be shrinking their balance sheet. So let me make the number very explicit. The treasury will be borrowing 1.2 trillion in the coming year. Theed will be selling bonds at 600 billion in the coming year. Who is going to absorb the 1.8 trillion of new debt that will be flooding into the bond market? We're going to have a collision. The interest rate is heading towards 3% or more. That will totally undermine, this phony, fantastic stock market bubble we have. Trump is making a drastic mistake by embracing the public he inherited, the impaired economy he inherited. He should get the playbook of Ronald Reagan out. Ronald Reagan blamed Jimmy Carter for three years for the mess he inherited. And didn't dare start bragging until 1984 when the economy was back on a solid footing. Trump is walking into a miserable trap that he is going to pay for dearly and the Republicans."
