Arthur Laffer, the former economic advisor to President Ronald Reagan, says he expects inflation to continue accelerating until 2026. However, he says that it can still be tamed without a recession. “We need tight money and tax cuts to increase the supply of goods and services,” he told Kitco News over the weekend. The economy seems to be a bit of a mystery right now. While we all stare and wait, The Atlantic is working to answer the following questions: If gas prices are plummeting, why is inflation rising? If jobs are growing, why is GDP falling? If everybody’s on vacation, why are consumers miserable?

 

Kitco News
Inflation will remain high until 2026; ‘You don’t need a recession to bring down inflation,’ says Ex-Reagan advisor – Arthur Laffer

Reagan’s former economic advisor, Arthur Laffer, expects inflation to continue to accelerate, and to be well outside of the preferred range of 2 percent until 2026. Laffer, who is Founder and Chairman of Laffer Associates, nevertheless believes that inflation can be tamed.

The June inflation figure was 9.1 percent, the highest since 1981.

“You don’t need a recession to bring down inflation,” said Laffer. “We need tight money, and tax cuts to increase the supply of goods and services.”

Laffer, who advised U.S. Presidents Ronald Reagan and Donald Trump, explained that when taxes are cut, this causes firms and individuals to produce more, which reduces prices.

He said, “if you have a bumper crop in apples, what happens to the price of each apple? It goes down. If you have a bumper crop in the production of goods and services, what happens to the price of each unit? It goes down, the inflation gets stuck.”

Keep reading, here.

 

The Atlantic/Derek Thompson
The Three Biggest Mysteries About the U.S. Economy Right Now

The U.S. economy can’t be this weird forever. That’s what I keep telling myself, anyway. Eventually, I think, financial news will be boring again. Eventually, I pray, the U.S. economy won’t resemble some ever-morphing Rorschach blot. But after a year of shortages, a Great Resignation, and rising inflation, I’m still waiting for normalcy.

Here are three questions that get to the heart of what makes this moment so strange. Answering them, or at least attempting to answer them, could help indicate where things go in the second half of the year.

Continue reading, here.

 

Fox Business/ Talia Kaplan
Condition of economy ‘terrible’ as inflation hits fresh 40-year high: Investment expert

Kingsview Wealth Management Chief Investment Officer Scott Martin argued on Sunday that the condition of the U.S. economy is “terrible” as inflation reached a new 40-year high.

Martin, a FOX Business contributor, made the comment on “Fox News Live” reacting to the latest Fox News survey, which found that almost all voters are worried about inflation and that large numbers continue to rate the economy negatively with a majority expecting the situation to be worse next year.

Only 17% of respondents rated the economy positively, the lowest in nearly 10 years. Eighty-four percent said it is in only fair or poor shape. And a 52% majority thinks it will be worse next year. This is the first time in intermittent surveys going back to 1998 that over half have felt the economy will be worse a year from now.

You can read the full article, here.

 

 

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