Peter Schiff: Stimulus Will Be Disaster

[Kevin_Kennedy]

The fiscal stimulus bill being debated in Congress not only won't help the economy, it will make the recession much worse, says Peter Schiff, president of Euro Pacific Capital.

Schiff scoffs at the notion the economic decline is starting to level off and concedes no government action means a "terrible" recession. But the path of increased government intervention will lead to "unmitigated disaster," says Schiff, who gained notoriety in 2007-08 for his prescient calls on the housing bubble and U.S. stocks.

Peter Schiff Stimulus Bill Will Lead to "Unmitigated Disaster: Tech Ticker, Yahoo! Finance

 

[Paulie]

It's eventually going to lead to higher taxes, higher inflation, and LOST JOBS.

But that's ok with Ravi, because government jobs will be created instead

 

[Andrew2382]

guy knows his stuff

 

[Paulie]

guy knows his stuff

Eh, he's not perfect. He was dead wrong about moving out of the Dollar into foreign equities last year. His clients lost a lot on that. I was ALMOST one of them, but decided against it.

 

[auditor0007]

This should make everyone cringe.

Internet Archive: Details: Harry Dent The Coming Depression

 

[Annie]

This should make everyone cringe.

Internet Archive: Details: Harry Dent The Coming Depression

Keep this one going, I want to watch this when I'm home. Can't at school, lunchtime detention officer here. Silent lunch, besides I wouldn't want to scare the 8th graders, they're scared enough about the economy.

 

[mash107]

It's eventually going to lead to higher taxes, higher inflation, and LOST JOBS.

But that's ok with Ravi, because government jobs will be created instead

eventually? i think 1.8 million jobs lost already is bad enough... and one can't blame that entirely on the housing market collapse.

 

[Modbert]

guy knows his stuff

Eh, he's not perfect. He was dead wrong about moving out of the Dollar into foreign equities last year. His clients lost a lot on that. I was ALMOST one of them, but decided against it.

And you want to follow his advice NOW? Now that is rich.

Of course, whatever prediction he isn't right on; his supporters can just say "don't worry, it will happen eventually".

 

[Kevin_Kennedy]

guy knows his stuff

Eh, he's not perfect. He was dead wrong about moving out of the Dollar into foreign equities last year. His clients lost a lot on that. I was ALMOST one of them, but decided against it.

And you want to follow his advice NOW? Now that is rich.

Of course, whatever prediction he isn't right on; his supporters can just say "don't worry, it will happen eventually".

There's been a lot of criticism for Schiff recently, and his response has basically been "don't worry, it will happen eventually." That being said, he's absolutely right about this. He was right that the recession was coming, when few others did, and he's right that this stimulus is going to make things much worse. Those who believe trillion dollar deficits are the answer need to use some common sense and think, if government spending will get us out of this mess why are we in it in the first place?

 

[Paulie]

guy knows his stuff

Eh, he's not perfect. He was dead wrong about moving out of the Dollar into foreign equities last year. His clients lost a lot on that. I was ALMOST one of them, but decided against it.

And you want to follow his advice NOW? Now that is rich.

Of course, whatever prediction he isn't right on; his supporters can just say "don't worry, it will happen eventually".

The guy was one of a select FEW who had the balls to go on TV during the height of the housing boom and predict the collapse, even in the face of being literally LAUGHED at by the other pundits.

I trust his views on the government's domestic capital allocation, he understands the consequences. I part ways with him on investment advice, because no one can be sure what a currency is going to do.

 

[Paulie]

It's eventually going to lead to higher taxes, higher inflation, and LOST JOBS.

But that's ok with Ravi, because government jobs will be created instead

eventually? i think 1.8 million jobs lost already is bad enough... and one can't blame that entirely on the housing market collapse.

When I said lost jobs, I meant from the stimulus. The ones being lost now are from something entirely different. I'm arguing that the proposal to spend another trillion dollars is only going to lead to more lost jobs. On that I'm sure you agree, based on how I've seen you post around here.

 

[mash107]

It's eventually going to lead to higher taxes, higher inflation, and LOST JOBS.

But that's ok with Ravi, because government jobs will be created instead

eventually? i think 1.8 million jobs lost already is bad enough... and one can't blame that entirely on the housing market collapse.

When I said lost jobs, I meant from the stimulus. The ones being lost now are from something entirely different. I'm arguing that the proposal to spend another trillion dollars is only going to lead to more lost jobs. On that I'm sure you agree, based on how I've seen you post around here.

how would one really know that those jobs lost wasn't a direct result from the $8 trillion or so that was given in bailouts and guarantees for assets?

 

[Paulie]

eventually? i think 1.8 million jobs lost already is bad enough... and one can't blame that entirely on the housing market collapse.

When I said lost jobs, I meant from the stimulus. The ones being lost now are from something entirely different. I'm arguing that the proposal to spend another trillion dollars is only going to lead to more lost jobs. On that I'm sure you agree, based on how I've seen you post around here.

how would one really know that those jobs lost wasn't a direct result from the $8 trillion or so that was given in bailouts and guarantees for assets?

The liability swaps the Fed made are something different. All that happened there was the Fed assumed the various toxic liabilities onto their own balance sheet. Results from that would most likely come in the form of inflation at some point down the road from their monetary policy.

The TARP is different. That's a taxpayer guaranteed loan, which is appropriated by borrowing money and going into deeper deficit to finance it. Taxpayers will be responsible for that for years to come, as well with this current proposal of a "stimulus".

Both situations are going to lead to lost jobs. Taxpayer liability, and inflation tax from monetary expansion.

None of this is good policy. Not a single bit of it.

 

[Agnapostate]

Again with Peter Schiff. Free marketers cite his predictions as though it's indisputable proof that the Austrian school is now superior, while ignoring the fact that socialist heterodox economists predicted crisis almost a decade ago.

In her introduction to Political Economy and Contemporary Capitalism: Radical Perspectives on Economic Theory and Philosophy, Dawn Saunders of the University of Vermont asks "where will we be in 2009?" Her answer was this.

"A humbling question, given the poor track record of economists in the last two years in predicting the end of the current expansion. But it is surely safe to assume we will have at least one cyclical downturn in this next decade, perhaps generated by disruptions in financial markets, or as continued drag from foreign stagnation reduces prospects for profitable investment. Our expansion is currently dependent on consumer confidence, which could be disrupted either by stock market problems or an end to the recent gains in real wage growth. Our reduced state sector and our abolished fiscal deficit will reduce the cushion we've enjoyed in past recessions; our transformed welfare system, now a block grant system and thus devoid of its former role as automatic stabilizer, will place severe stress on state budgets and cause great harm to people in need. In other words, the next recession could be unusually deep, unusually harsh, and unusually regressive in its effects."

Hence, there's far greater cause to listen to the radical school than the Austrian school, in my opinion.

 

[Paulie]

Your school of economic thought is even less received in the mainstream than Austrian thought. But hey, at least you're still free to discuss it, right?

 

[Agnapostate]

Your school of economic thought is even less received in the mainstream than Austrian thought. But hey, at least you're still free to discuss it, right?

I don't recall denying that it was. I merely denied that there was rational cause for that to be so. In fact, in the beginning of the Keynesian thread, you inquired about my school of economic thought, and when I asked you to specify, you never replied.