David Henderson on Trumponomics, Deficits, and Immigration

Back in October, Bob spent an hour with Stephen Moore – former president of the Club for Growth, and author of *Trumponomics.* Moore is a supply-side economist, meaning he thinks that many tax cuts pay for themselves in the long run. He and Bob talked about why the drop in the corporate income tax from 35% to 20% was good news for average Americans, and Bob asked “Why not drop it even lower?” Arthur Laffer, Moore’s co-author on Trumponomics, is famous for the Laffer curve, which counterintuitively holds that you can raise even more revenue by lowering taxes, since that creates higher growth and more incentives to produce wealth, which means a bigger tax base.Trump he has consulted Moore on a number of his key economic policies — including, thankfully, free trade. Moore has pushed Trump to remove tariffs, and for the time being we seem to be angling in that direction. Now, President Trump has nominated Moore to the Federal Reserve Board, which many take as a sign that of the on-going politicization of the central bank. Moore wrote an oped in the Wall Street Journal which called the Fed a “threat to growth,” and by some measures it does look like the recent tightening is going beyond what’s necessary to keep inflation in line.Professor Emeritus David Henderson of the Naval Postgraduate School in Monterey, California joined the show’s producer, Charlie Deist, to give an update on how “Trumponomics” is playing out in the economy, and to analyze whether the growth we have seen under Trump’s presidency is sustainable. They also discuss whether Moore is a suitable candidate for the Federal Reserve Board, or whether his pro-growth, free-market optimism would be better utilized in a different position. Lastly, David and Charlie talk about the unusual proposition of a “strategic default,” by the U.S. Federal Government, which would let taxpayers off the hook and leave bondholders holding the bag for the risk they took in trusting such an undisciplined spender.