Stephen Moore to Newsmax: 'Dumbest Thing' To Pass $2T Debt Bill President Joe Biden. (Mandel Ngan/AFP via Getty)
By Sandy Fitzgerald | Saturday, 05 June 2021 06:35 PM
Former Trump economist Stephen Moore says passing President Joe Biden's $2 trillion debt bill would be the "dumbest thing" as the inflation rate continues to climb.
"If you look at what's happening with basic raw materials and problems in the supply chain, you just see prices across the board rising," said Moore, who appeared on Newsmax's "The Count" with Peter Morici Saturday.
"The Fed continues to say that the price increases are temporary, and they think they have it under control," said Moore. "I'm not so sure…my worry is that once you start getting some acceleration and inflation, it's really hard to stop."
Meanwhile, Democrats in Congress are pushing Biden to approve a fourth stimulus check, but Morici, taking a jab at Rep. Alexandria Ocasio-Cortez, D-N.Y., commented that the White House "shouldn't take the advice of former bartenders with regard to fiscal policy."
"We have adequate stimulus in the system," said Morici. "Folks have lots of money in their checking accounts because they haven't spent what we've already sent them and their credit card balances are very, very low."d they still won't return to where they were a year ago.
"The bottom line is, do we start to see people get into an inflationary psychology, where businesses start the notion that they will have to raise prices every year?" said Morici.
"During the Trump years, wages went up, minorities did better, living standards improved. The businesses were able to couple this with productivity improvements, which kept prices in check. So that was a very virtuous cycle."
Now with Democrats in charge, they're following the "usual impulse" to raise prices, said Morici.
"It's kind of like a sailor when he comes into a bar in Queens, and he says, you know that the Republicans own that liquor. Let's just port for everyone, and that's what they're doing. And of course, what's happening is that the economy is getting a little bit drunk."
Meanwhile, trillions of dollars have been pushed into the economy, and as a result, the consumer price index is up, but "it's kind of phony," said Moore.
"We've inflated all of this because of these giveaways," he said. "One of the reasons the Wall Street has been on this bull market is that I believe we reached what I call peak Biden. What I mean by that is, I think that the wind is out of Biden's sails."
Democrats are defecting from Biden's side, Moore continued, and the president also this week slammed two key senators from his party, Sens. Joe Manchin and Kyrsten Sinema, because of their reluctance to stop the Senate filibuster to allow his bills to pass more easily.
"He cannot afford to lose a single Democrat because one of the most important things that have been said about the economy in the last few weeks is when Mitch Mcconnell said, I've got 50 no votes against any tax increase. And that's good news," he said.
Meanwhile, Senate Republicans shouldn't come out with a bold counteroffer when it comes to the question of raising taxes to pay for an infrastructure plan, said Morici.
"I think that the user-fee concept on infrastructure was very sound," he said. "The people that use the road should pay for the roads."
In addition, Biden is extending his infrastructure talks because if he cuts them off, then he'll have to negotiate with his party, where there are thin majorities at play in the Senate, said Morici.
"The very fact that he is snipping at Republican senators tells you that he's in a position of weakness within his own party," said Morici. "He's listened too long to AOC, and now he's got a problem."