OAN’s Daniel Baldwin
11:59 AM – Monday, September 11, 2023
U.S. Treasury Secretary Janet Yellen says she is very confident that the economy can achieve a soft landing amidst worries of a possible recession. But Reagan economist Dr. Arthur Laffer says that she is missing the point entirely.
“The right question is really what does the U.S. economy look like in the long perspective,” Laffer told One America News. “And since about the year 2000, the U.S. has been in a very major secular decline.”
Laffer argues that Yellen should be taking a more holistic view of the health of the U.S. economy.
“What will happen not only this year and this next quarter, but what will happen over the coming 5, 10, 15, 20 years to U.S. prosperity in the U.S. role in the economy, those are the things that I think are really important,” said Laffer. “And those are the issues that the Secretary of the Treasury should be focusing on, instead of this silly little market talk about whether stocks are gonna go up or go down or soft landing.”
There have been multiple warning signs regarding the health of the overall U.S. economy. The Beige Book, which was released by the Federal Reserve, suggested that consumers “may have exhausted their savings and are relying more on borrowing to support spending.”
UBS is projecting that more than 50,000 stores could close by 2027 due to “expected cutbacks in consumer spending, tighter credit and the continued shift to e-commerce.”
Additionally, a government watchdog group has projected the federal deficit to double to roughly $2 trillion this year.
“We all know that government spending is deleterious to the economy, not only in the short run but also in the long run,” Laffer said. “And [the Biden Administration] has been spending like drunken sailors.”
Despite this estimate, Biden has claimed that he has lowered the deficit.
“Unlike the last president, in my first two years … I cut the deficit $1.7 trillion,” Biden told a Pennsylvania crowd on Labor Day.
The Committee for a Responsible Federal Budget cited both increased Social Security payments due to inflation and the Inflation Reduction Act.
“We need to get back to basics,” Laffer told OAN. “Low rate, broad-based, flat tax spending, restraint, sound money, minimal regulations, free or trade, and then get the hell out of the way, and let the economy solve itself.”
The U.S. national debt also sits at nearly $33 trillion. A new CNN poll revealed that 58% of U.S. adults surveyed believe Biden’s policies are making the economy worse. Laffer says it is not too late to turn things around, but the Biden Administration needs a serious policy pivot.
“It’s like a cigarette smoker worrying about his health,” Laffer said. “And he’s so worried he has to have another pack of cigarettes. It’s the wrong way to go.”
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