President Biden is moving forward with his $1.9 trillion coronavirus stimulus plan, but the increased spending could compromise the economy, Laffer Associates chairman Art Laffer warned on “Kudlow” Tuesday.
Laffer explained to FOX Business Network’s newest program that the administration’s rampant spending would be put to better use if it prioritized supporting health care or creating jobs.
“I think this does not make sense,” he said. “Anything on health care, that makes a lot of sense ... Anything for jobs creation, that would be good. But that’s [a cost of] a lot less than even a trillion dollars. That would be a small amount compared to the $2 trillion.”
“I think it’s a killer of the long-run economy of the U.S.," he stated.
Even though trillions in economic support might sound helpful to many Americans at the moment, Laffer said this “huge” amount of money won’t look so appealing after a future market crash and debt spike.
“I think we still have a trillion left over from the stimulus package before,” he said. “Two trillion is just way too much. We’ve gone from a debt level of 84% of GDP now to 115% and it’s continuing to rise."
Laffer pointed out that Republican economists aren't the only ones are critical of increased spending. In a recent Washington Post op-ed, former Clinton Treasury Secretary Lawrence Summers argued "bold measures" such as these must be taken into "careful consideration."
"He thinks it's way too large," Laffer said. "Other people are looking at this thing as being potentially very damaging to the long run."