“This is the least responsible macroeconomic policy we’ve had in the last 40 years. The primary risk to the United States economy is overheating — and inflation… Policymakers need to accept economic reality. The moment has come to move past emergency policies.”
— Larry Summers, Director, National Economic Council
Larry Summers knows what he is talking about. A former Secretary of the Treasury, president of Harvard University and Director of Economic Policy under President Obama, his warnings merit attention.
Both fiscal (Biden’s $6 trillion budget) and monetary (money supply up 25%) policies under the current presidential administration are irresponsible, given the economic recovery.
Inflation Prediction May be Off
What’s remarkable about the Biden/Harris budget are the crazy economic assumptions. President Biden’s economists are assuming an inflation rate of only 2.1% over the next couple of years.
Source: American Enterprise Institute
The chart directly above shows that inflation is heating up far above 2.1%. The April Consumer Price Index (CPI) rose 3.9%, double from the previous month. I expect price inflation to rise to 4% or more in the coming years, based on today’s policies.
The $6 trillion budget proposal is a monstrosity, proving that small government is over. Biden proposes enormous “investments” in education, green energy, infrastructure, universal childcare and other big-government boondoggles.
Maximum Taxes, Maximum Deficits
To pay for it, he wants Congress to make the tax system even more progressive than it already is. Biden proposes raising taxes on the wealthy and entrepreneurial class, removing the exception on long-term capital gains and forcing those people to pay more in income and Medicare taxes.
Economist John Ramsey McCulloch said it best, “The moment you abandon the cardinal principle of exacting from all individuals the same proportion of their income or their property, you are at sea without rudder, and there is no amount of injustice or folly you may not commit.”
Source: American Enterprise Institute
Even with the tax increases, the federal deficit will continue to grow. The Biden budget expects the deficit to be $1.8 trillion at a minimum.
It will undoubtedly be more than $2 trillion, and the red line (see chart above) will continue to skyrocket.
Result: Low Growth, High Inflation
What’s more shocking is that President Biden’s economists predict that real gross domestic product (GDP) will grow only at an annual rate of 1.8% a year under his plan! That’s less than the economic growth rate under Trump and much less than the average real growth rate of 3% historically.
Stagflation, here we come.
Special Announcement: Newsmax to Cover FreedomFest
Big news! For the first time, Newsmax TV, the fastest-growing independent news channel in the country, will be covering our big FreedomFest show LIVE July 21-24. They will be filming the main stage sessions only.
Today, I will be on the popular “Chris Salcedo Show” on Newsmax TV between 5-6 p.m. EDT to talk about the Biden inflation, out-of-control spending and FreedomFest. Check your local listings.
Senator Mike Lee (R-UT) will speak at FreedomFest.
I’m also happy to announce that Senator Mike Lee will address FreedomFest on the topic “Can the Senate Hold the Line Against Biden’s Radical Agenda?” He’ll also reveal the new endeavor he’s working on that could change the direction of Washington politics… for good!
Other new speakers include Amala Ekpunobi, of Prager University, Ron Bailey, science reporter for Reason magazine and Mark Meckler, who will explain how he saved Parler during the censorship spike in 2020.
There’s something for everyone at FreedomFest. Plus, we will have Gov. Kristi Noem, actor Dennis Quaid, Grover Norquist, Larry Elder, J. P. Sears, Dave Rubin… all the free-market think tanks… the 10th-anniversary of the Anthem film festival… and the 40th-anniversary celebration of my newsletter at the historic Alex Johnson Hotel.
We are adding 50 new registrations every week. We already have more than 2,200 attendees signed up and expect a record turnout. We could sell out.
We just added a new group of hotel room blocks, so I recommend you act now to avoid being disappointed.
Take advantage now of the “greatest libertarian show on earth” by signing up at www.freedomfest.com, or by calling Hayley at 1-855-850-3733, ext. 202. Use code EAGLE50 to get $50 off the registration fee.
Good investing, AEIOU
You Blew it!
Guess Who Wrote a New Introduction to Milton Friedman’s Classic Book?
The University of Chicago Press has just released a new paperback edition of Milton Friedman’s classic “Capitalism and Freedom,” and guess who wrote the introduction?
New York Times columnist Binyamin Appelbaum is the author of the notorious book, “The Economists Hour,” which blames all of the ills of the economy on Friedman, including the financial crisis of 2008. Friedman, Hayek and other free-market economists are called “false prophets” because they supported lower taxes and deregulating the economy.
Milton must be rolling over in his grave. What has happened to the University of Chicago Press?
It reminds me of the Modern Library edition of Adam Smith’s Wealth of Nations — the introduction was written by a Marxist, Max Lerner.
Meanwhile, guess who wrote the introduction to the latest release of The General Theory by John Maynard Keynes? It was not a well-known critic like Thomas Sowell or Steve Moore, but Paul Krugman, who is super Keynesian.
Let’s face it — the publishing world has become “woke.”
Name me a time when a free-market economist wrote an introduction to a book by Marx, Keynes, Galbraith or Veblen?
The enemies of liberty never sleep, do they? We must be ever vigilant.