2011 Budget the "Perfect Plan for Catastrophe"
Arthur Laffer, former head of the Office of Management and Budget, has decided that President Obama’s 2011 budget “is the perfect plan for catastrophe.” Laffer has a variety of policy recommendations he presents in an interview released today, and some of his more interesting thoughts include the three we’ve transcribed below:
On unfunded liabilities:[including civil service and military retirement and medical benefits, Medicare, Medicaid, and the Pension Benefit Guaranty Corporation] What you’ve got to do is go through all of these programs very, very carefully and make sure you eliminate those things that are pushing these programs into huge unfunded liabilities. America cannot afford any of these programs. The estimates on the unfunded liabilities are somewhere in the $100+ trillion range and when you realize our GDP is only $14 trillion, and when you realize total federal tax receipts are only $2.2 trillion, when you have unfunded liabilities of over $100 trillion you realize you’ve got a real disaster on hand.
On the stimulus and bailouts:OK, what should we do with the unspent stimulus and bailout funds? Return it back. Basically what you should do is just reduce the deficit, make sure you don’t spend it. Those programs have not only not done any good, they have actually hurt the economy and hurt it a lot.
On monetary policy: Printing money the way the Fed has done, we’ve have the largest increase in the monetary base in the history of the United States from colonial times to the present, times ten! And, that stimulates asset values, that stimulates stock prices, bond prices, very low interest rates, gold prices, spot commodity prices, oil prices… it does all that. But those effects don’t last forever. In fact, they’re really pretty short lived.
Watch the Newsmax TV video interview below.