Tags: Larry Summers | Border | Adjustment | Tax

Larry Summers: Border Adjustment Tax Would Spike Dollar 'Substantially'

 (Getty/Chip Somodevillla)

Tuesday, 07 February 2017 10:37 AM

Former Clinton Treasury Secretary Larry Summers told CNBC that the House GOP's border adjustment tax could have negative ripple effects around the globe.

"If we do the border adjustment, my guess is that the dollar will rise substantially," Summers told CNBC Tuesday.

"The dollar will rise but it won't rise enough to fully protect the importers," said Summers, who served as President Clinton's treasury secretary and President Barack Obama's National Economic Council director.

"I don't think it's a very good idea because I think it will cause financial problems all over the world because all kinds of dollar debtors will hugely burdened," he said.

But one of the most-respected economic gurus of modern times politely disagrees with Summers.

Veteran financial guru Larry Kudlow, who served as the Trump campaign's senior economic adviser, said the president-elect's plan for a ''tax holiday'' so that American companies can bring back profit that was generated overseas at a lower rate will revitalize America.

"You will re-oxygenate the entire economy," said Kudlow, a Newsmax Finance Insider, radio talk-show host and CNBC senior contributor. "I just think repatriation of cash is absolutely terrific," he recently told CNBC.

Meanwhile, other respected economic voices also have expressed worry about the early days of Trump's presidency.

For example, Goldman Sachs Group Inc. has warned that a tidal wave of U.S. political and economic risks are building against Trump's agenda, little more than two weeks into his administration, Bloomberg reported.

"Following the election, the positive shift in sentiment among investors, business, and consumers suggested that the probability of tax cuts and easier regulation was seen to be higher than the probability of meaningful restrictions to trade and immigration," Goldman Sachs economists led by Alec Phillips wrote in note published late last week.

"One month into the year, the balance of risks is somewhat less positive in our view." 

And while many of his campaign vows have yet to be fulfilled into presidential accomplishments, Trump will be a demanding leader who applies the best of his negotiating skills to push for U.S. growth, bestselling author David Horowitz told TheStreet.com.

Trump won’t be an ideological purist like Republicans who support free trade but don't fight for fair trade, Horowitz said.

“If you just say, ‘well we're for free trade and we're not going to look at the deals that we make’ -- that's not a good idea,” he said. “We've had an anti-business president now for eight years who doesn't take a hard-nosed attitude towards these deals. Trump is going to get better deals for us, which is still free trade.”

Horowitz's new book, "The Big Agenda: President Trump's Plan to Save America," reveals Trump's "first 100 days strategy" to roll back Obama's legislative and executive record.

Horowitz's new book is the first book about the Trump presidency and has soared to the top of the Amazon bestseller charts, becoming the No.1-selling book on the web. Trump will also lead the way in making infrastructure spending to boost the U.S. economy, Horowitz said.

“If the economy grows as it will under Trump, there's going to be a lot more money to spend,” he said.

"Big Agenda: President Trump's Plan to Save America" is available at bookstores everywhere – or get your copy on Amazon – Click Here Now

(Newsmax wire services contributed to this report).

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Border adjustment tax would spike the dollar 'substantially,' Larry Summers says
Larry Summers, Border, Adjustment, Tax
Tuesday, 07 February 2017 10:37 AM
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