The tax reform legislation has our economy booming and the boom will keep rolling unless the Federal Reserve kneecaps it by continuing to raise interest rates, according to informal Trump economic adviser Stephen Moore.
Moore is a Heritage Foundation and FreedomWorks scholar and is also co-author of “Trumponomics: Inside the America First Plan to Revive Our Economy.”
He says the 2017 tax reform bill is doing wonders for our economy.
“The tax reform has been a spectacular success, with an amazing amount of money coming into the United States and factories being built. We’re in the biggest construction and manufacturing boom in 50 years in this country right now.
“You see we have the lowest unemployment rate in 50 years. Wages are rising. It’s hard to point to any single thing that hasn’t worked with the tax cut,” said Moore.
He says lowering tax cuts for corporations and small businesses as well as individuals was more about generating job creation than balancing the budget but he says the Congressional Budget Office is already estimating greater revenues as a result of the legislation.
“The Congressional Budget Office has already increased its growth estimate over the next ten years by $6 trillion since we passed the tax cut. The federal government is going to get 20 percent of that, so that’s going to be $1.5 trillion right there,” said Moore.
Moore also rejects the argument from Democrats that the tax reform is just providing a one-year “sugar high” that will dissipate in 2019, although he does urge lawmakers to make the tax cuts permanent.
But the past three months – and especially the past couple of weeks – have shown major losses on Wall Street. If the Trump economic plan is so sound, why is this happening?
Moore says the Federal Reserve is to blame by raising interest rates.
“We’ve got a massive problem now on our hands. The federal reserve is just crushing the economy. It’s sucking dollars out of the economy at a time when we need the feds to be putting more money into the economy,” said Moore.
“The Fed made a tragic mistake on Dec. 19 when they raised interest rates. They should be cutting interest rates, not raising them. We’re in a deflationary spiral right now. Look at what’s happening with oil prices. Look what’s happening to the prices of wheat, cotton, soybeans, and copper. It’s a very, very dangerous situation,” said Moore.
Listen to the full podcast to hear Moore explain how strong Trump’s re-election chances will be if the Fed stops raising interest rates and what those chances will be if they don’t. He also lays out the contrast we’re likely to see in economic policy from Trump and the eventual Democratic nominee.