As President-elect Donald Trump prepares to take office, leading economist Peter Schiff warned Tuesday on Newsmax of the impending economic challenges he will inherit.
During an appearance on âNewsmax New Yearâs Eve With Shaun Kraisman,â Schiff said the problems within the U.S. economy have been largely overlooked by investors, which contributed to Trumpâs electoral win. The economist suggested drastic measures as Trump faces these turmoils, including substantial cuts to government spending, entitlements, and defense.
âI think itâs better that Trump was elected over Harris,â Schiff said. âThe reason that Donald Trump won is because the economy is a mess and, unfortunately, itâs going to be a bigger mess once Trump takes the helm. Theyâre going to get worse, and I think the markets could head lower.â
Schiff proposed drastic cuts in government spending.
âThey didnât start with Biden. They got a lot worse under Biden, but we need some substantial cuts in government spending, not just waste, fraud, and abuse, but we need to really make some cuts to entitlements, to defense spending,â Schiff said. âWe need much higher interest rates, unfortunately, and that means we need a much lower stock market. We need a severe recession in order to correct these imbalances. Weâre not going to get to where we need to go without a lot of short-term pain, and, unfortunately, nobody is prepared for that, and Donald Trump didnât campaign on that.â
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Schiff  also said that the economic distress is underreported and that includes the highest credit card delinquency rates since the 2008 financial crisis.
âI think weâve been in a recession for at least a year. I think the media and the government were lying about it. I mean, thatâs why Trump won. If you look at the news, just the other day, we found out that credit card delinquencies are the highest theyâve been since the 2008 financial crisis,â Schiff said. âIt was all part of the big lie, but the voters didnât buy it. They voted for Trump.â
Last week, Kentucky Sen. Rand Paul released a report that identifies more than $1 trillion in government waste over the last year. His 2024 âFestivusâ report details frivolous expenditures such as a Las Vegas pickleball complex and a cabaret show on ice, marking a decade of these annual reviews.
Throughout Bidenâs tenure, Americans grappled with escalating costs, with inflation reaching a high of 9.1% in June 2022. Although inflation has somewhat subsided since then, the consumer price index, which tracks the cost of everyday goods, still showed a 2.7% year-over-year increase in November, according to a December report from the Bureau of Labor Statistics.
Experts say they link the surge in inflation rates to substantial government spending during the Biden-Harris administration. As of last week, U.S. Treasury Fiscal Data reported the national debt at $36.16 trillion.
(Featured Image Media Credit:Â Screenshot/Newsmax)
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