Stockman: Expect Fiscal Calamity in Washington

David Stockman Fiscal Calamity

By Craig Wilson

This post Stockman: Expect Fiscal Calamity in Washington appeared first on Daily Reckoning.

[Ed. Note: To see exactly what this former Reagan insider has to say about Trump and the fiscal threats from the market facing a massive debt crisis, David Stockman is sending out a copy of his book Trumped! A Nation on the Brink of Ruin… And How to Bring It Back to any American willing to listen – before it is too late. Get your free copy CLICK HERE.]

David Stockman joined CNBC’s Futures Now to discuss the Trump fiscal tax policy and what to expect from leadership in Washington.

The interview started by asking about the Trump tax plan that was presented and what his read on the proposal. Stockman responded, “I think it is a wonderful fantasy. You could call it the Donald Trump candy store off of 1600 Pennsylvania Avenue. It is clearly dead before arrival (DBA) because there is no way to pay for the $7.5 trillion in cost of the main features. Which is double your standard deduction, including the three brackets, and then the reduction of business taxes that feature both corporate and noncorporate going down to 15% – which itself would cost nearly $4 trillion.”

David Stockman is the best-selling author of Trumped! A Nation on the Brink of Ruin… And How to Bring It Back. Stockman served as a two-term Congressman from Michigan and was also a member of President Ronald Reagan’s administration where he was the Director of the Office of Management and Budget.

“When Secretary Mnuchin said “no sweat” we’ll close some loopholes and get growth I think he was totally lacking in seriousness and credibility. On the loopholes, yes – there is $1.6 trillion allegedly of tax expenditures per year. When he brought up charitable contributions, we’re not touching that which is the equivalent of $50 billion, and would not touch mortgages either which is $60 billion.”

“I know Mnuchin’s not going to touch the healthcare exclusion which is $175 billion a year because that was included in the House “Obamacare repeal bill” and that did not even get out of the GOP caucus. There is $200 billion of loopholes for pensions, IRA’s, 401(k)’s and so forth. I know he’s not going after those dividends and capital gains that is the equivalent of $130 billion. He also did not say a word about state and local tax loopholes that are the equivalent of $70 billion a year. You can’t fund this bill with loopholes.”

“Frankly, there is more growth that is built into the Congressional Budget Office’s (CBO) baseline right now than can be achieved over the next decade even if you do have a tax cut. During the last ten years, nominal GDP grew at 3% a year and that is really what drives revenue and the budget. The CBO assumes it is going to grow at 35% higher, 4% over the next ten years. Mnuchin has even said that it was going to grow …read more

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