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 “Newsmax New Year’s Eve With Shaun Kraisman,” Schiff said the problems within the U.S. economy have been largely overlooked by investors, which contributed to Trump’s electoral win. The economist suggested drastic measures as Trump faces these turmoils, including substantial cuts to government spending, entitlements, and defense.
“I think it’s better that Trump was elected over Harris,” Schiff said. “The reason that Donald Trump won is because the economy is a mess and, unfortunately, it’s going to be a bigger mess once Trump takes the helm. They’re going to get worse, and I think the markets could head lower.”
Schiff proposed drastic cuts in government spending.
“They didn’t 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,” Schiff said. “We 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. We’re 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 didn’t campaign on that.”