Tags: Barack Obama | Fox News | National Debt | obama budget | rising interest rates | deficit crises | Art Laffer

Art Laffer: Rising Interest Rates, Obama Budget Means Deficit Crisis

By    |   Monday, 02 Feb 2015 06:25 PM

President Barack Obama's $4 trillion budget proposal will come crashing down once interest rates inevitably rise, says Art Laffer, who served as an economic adviser to President Ronald Reagan.

"I don't think interest rates will stay this low forever," Laffer said Monday on Fox News Channel's "Your World with Neil Cavuto."

All the debt held by the public is short term, and the Federal Reserve owns almost all of the long-term debt, Laffer said.

As soon as interest rates start rising, they will rise as an expense of the federal government and won't have a long-delayed effect, he said.

"So, if rates rise and you have all this debt sitting out there, you're going to have a serious deficit problem just by interest on the national debt alone, Laffer said.

Obama assumes all of his proposed taxes will produce revenues, and also that all of his taxes will pass Congress with no "supply-side" response, he said.

"But let me just tell you, that's not the way the world works," Laffer told Cavuto. "If you tax people who work and you pay people who don't work, which is what his proposal is, you're going to find a lot of people not working, many more than you expected."

Laffer is best known for popularizing "The Laffer Curve," which projects which percent of taxation, between zero and 100, will bring in the most revenue for government.

© 2017 Newsmax. All rights reserved.

 
1Like our page
2Share
US
President Barack Obama's $4 trillion budget proposal will come crashing down once interest rates inevitably rise, says Art Laffer, who served as an economic adviser to President Ronald Reagan.
obama budget, rising interest rates, deficit crises, Art Laffer
233
2015-25-02
Monday, 02 Feb 2015 06:25 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved