Despite declaring Donald Trump the winner early Tuesday evening on the FOX Business Network, David Stockman doesn’t predict a rosy economic outlook under the president-elect.
Instead, the former Director of the Office of Management and Budget under President Ronald Reagan predicts the U.S. is heading toward the economic abyss, and believes the payroll tax should be “eliminated entirely.”
“That’s what’s killing jobs in this country,” Stockman said. “We’ve got the highest cost of labor in the world… So we need to basically replace the payroll tax entirely with a consumption tax. Tax labor less, tax consumption more. We need to do something. We’re not going to solve this problem with an income tax cut.”
He added that the corporate tax should be eradicated instead of just being reduced.
“But you have to offset it, accompany it with huge spending cuts,” Stockman explained. “And he’s [Trump] basically said Social Security not touching. Medicare not touching. Defense we’re raising, more for the veterans, a big infrastructure program. It would be a fiscal nightmare if we even attempted half of what he’s talking about. But it won’t happen.”
But, Stockman, despite his dim economic outlook for America, said that President-elect Trump is not the “nightmare.”
“Trump was an instrument of great good because he got the voters of America to fire the Washington, Wall Street-ruling elites and establishment. The problem is there’s nothing to replace it. Trump doesn’t have a program, he doesn’t have a majority. Washington is going to immediately, I believe, fall into acrimony, paralysis, confrontation for a reason that no one’s mentioning today with all the excitement about stimulus.”
He added that the debt ceiling’s expiration in early March is causing part of the problem.
“It’s like a giant stink bomb that the outgoing President and [John] Boehner left on the doorstep last March and to get the Congress to vote a $20 trillion debt ceiling is going to be hellaciously difficult. It will dominate the first 100 days. They will not do anything.”