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Blankfein: Tax Cuts, Spending Like Economic 'Lighter Fluid on a Fire'

(Dollar Photo Club)

By    |   Wednesday, 14 February 2018 01:24 PM

Goldman Sachs CEO Lloyd Blankfein says the Trump administration tax cuts plus increased spending while the economy is growing is akin to throwing “lighter fluid on a fire.”

"It wouldn't have been what I would do. I think it's a very bold thing to kind of throw a little bit more lighter fluid on a fire that was already going," Blankfein recently told Bloomberg television.

Last week, the U.S. Congress passed and President Donald Trump signed into law a temporary spending deal expected to push budget deficits past $1 trillion annually with new military and domestic outlays, Reuters explained.

On Monday, Trump proposed a budget that called for spending $57 billion less in fiscal year 2019 than mandated in last week’s deal.

Deficits are project to grow $7 trillion over the next decade as the United States keeps borrowing record sums of money, the New York Times reported. That number could double if the economy is weaker than forecast or if the $3 trillion in spending cuts the White House seeks don’t materialize in Congress.

Trump’s budget proposal forecasts annual economic growth of at least 3 percent over the next three years, an aggressive target that is crucial to help cover the cost of $1.5 trillion in tax cuts passed by the Republican-controlled Congress in December.

The concern is that the economy could get overheated, forcing the Federal Reserve, which is already raising rates, to act more quickly. That, in turn, could stall out the economy, CNBC.com explained.

If the economy expands even more than it has, people will earn more money and pay more taxes, making the case for supply-side economics, Blankfein said.

"I think it's a risky thing. I probably wouldn't have done it," Blankfein said. "Do I think [it's] crazy? No. Wrong? We'll see."

Other experts are much more optimistic about the economy.

Economic guru Larry Kudlow contends that America now the “best country” for business in wake of the sweeping tax cuts engineered by President Donald Trump.

He praised the United States’ economy following the tax cuts and proclaimed the country now the “best” for business.

“We are on the front end of an investment boom that’s largely tied to the tax cuts,” Kudlow told New York AM 970 radio’s John Catsimatidis on “The Cats Roundtable.

“[It] will be stronger than anything we’ve seen in probably 25 years,” the former Ronald Reagan adviser told Catsimatidis.

“America is once again becoming the best investment environment in the world — the best country in which to do business. And that’s a powerful positive,” said Kudlow, a Newsmax Finance Insider and CNBC senior contributor.

(Newsmax wire services contributed to this report).

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Goldman Sachs CEO Lloyd Blankfein says the Trump administration tax cuts plus increased spending while the economy is growing is akin to throwing “lighter fluid on a fire.”
blankfein, tax, cuts, spending, lighter, fluid, fire
Wednesday, 14 February 2018 01:24 PM
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