by Peter Schiff, Schiff Gold:
Peter was recently featured on Real America hosted by Dan Ball.
It’s no secret that the government has been spending more than it collects, and there are indications that the Biden administration is addressing this issue.
Alarming news surfaced in a media release directly from President Joe Biden, suggesting the potential for tax increases to further finance deficits resulting from benefit payouts.
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Mr. Ball opened the discussion by asking Peter’s thoughts on this potential new Biden tax hike.
Peter promptly addressed the shortcomings in government benefits, specifically focusing on the Social Security Trust Funds. This was a subject he passionately discussed in a recent podcast episode, Episode 941.
He mentioned the challenges faced by the Social Security Trust Fund, and issued a warning about the worsening budget deficits, projecting the trust fund’s depletion by 2034.
Moreover, Peter emphasized the ongoing practice of the Social Security trust funds of borrowing through the sale of treasuries to cover deficits. The need for the Social Security funds to sell Treasuries underscores the escalating debt problem.
Peter shifts the conversation to a higher level, stating that the entire Bidenomics has been a “disaster” for the US economy.
Peter pointed to the dismal Empire State survey and consistently poor Philadelphia Fed numbers that have persisted over the past few months, extending through the better part of the last two years!
“Maybe the Biden administration is hoping that the old adage is true, that if you repeat a lie often enough, it’ll be believed. Because yeah, we have a disaster of an economy, even by the government’s own measures; manufacturing has been in a recession for almost two years. How do you have a booming economy when manufacturing is in a recession?”
Peter also addressed the abysmal personal finance numbers of the American public. In fact, the average household owed a staggering and unsustainable $103,358 last year, with Q2 consumer debt totaling $16.84 trillion nationally, according to Experian.
“Household debt is at an all-time record high and savings at an all-time low and a record number of people are having to work two or three jobs just to put food on the table or pay the rent. What kind of economic boom is that? And if this is a boom, just imagine the next bust!”
Peter criticizes Biden’s comments about “investing” in the economy, emphasizing that only the free market can deploy capital correctly and generate services, yield, and productive external benefits that uplift society as a whole.
“He [Biden] mentioned that the government is investing in the economy, investing in America. The government doesn’t invest in anything. It doesn’t have any money. I mean, it can print money, but that just creates inflation. All it does is tax the people that make the investments and he takes that money away, diminishing investment. And then they spend it and push up prices. That’s all they do. It’s the free market that invests and grows the economy. All the government does is stifle that growth.”
Mr. Ball concludes by asking about Biden canceling another $5 billion in student loan debt and how it would impact the economy.
Peter aptly points out that whenever a politician talks about canceling student loan debt, they never discuss who foots the bill. It’s always the taxpayer or the USD dollar owner who bears the brunt of the burden via inflation.
“Somebody has to pay for that because now the students have more money. Well, that means everybody else has less money and prices are going to go up as a result of the inflation that is created every time you forgive student loans.”
