President Joe Biden is wrong to think huge tax increases and big government spending will continue to fuel a strong economy, according to publisher Steve Forbes on Newsmax TV.
"Just the opposite," Forbes told Monday night's "Rob Schmitt Tonight." "The economy was doing well going into when this new administration took office. The [COVID-19] vaccination program, a miracle, was enforced. States, even blue ones, are starting to back down from their lockdowns. That's why the economy is roaring.
"The big potential headwinds to the economy are the big tax increases, the big spending, which means inflation and higher interest rates, wrecking our energy independence by going after oil and gas and things like that, and putting on mass regulations. All these things are going to harm the economy."
Forbes, a former presidential candidate, credited former President Donald Trump for teeing up a robust economy for Biden.
"The rescue plan was put in by Trump, and the de-rescue plan is what Joe Biden is proposing – big taxes, big spending big regulation," Forbes told host Rob Schmitt. "Never worked before, ain't going to work now."
Forbes was asked why the Consumer Price Index indicates the country is headed toward rising inflation.
"What's happening here is that the Federal Reserve is printing too much money," Forbes said. "That is devaluing the dollar. You're starting to see the gold price starting to move up, that's an indication. Commodity prices are soaring, that's another indication. The frothiness in some of the markets, you're seeing it in the cryptocurrencies.
"So, there's a lot of cash out there and there's not a lot of confidence at the end of the day that the Federal Reserve is going to be able to handle it."
Forbes said there was a big difference between the present situation and when the Fed printed money in 2008-09, when dollars were put in "a deep freeze" and held while the government paid interest to banks.
"This money [now] is going into the economy," he said. "That's one reason why prices are rising, that's one reason why interest rates are going to be going up, and that's a big reason we're going to have trouble down the road.
"This crowd is oblivious to it. They'll blame it on Donald Trump when the trouble hits."
Forbes also criticized the Federal Reserve for its approach in not raising interest rates.
"There's a new crazy theory out there called 'Monetary Theory,'" he said. "It's one that the Biden administration is clutching to.
"That's the idea: 'Money does not matter anymore.' If you want something in government, you just say, 'Bring it to me, I'll print the money, and there'll be no consequences.' It ignores 4,000 years if history when you do that nonsense."
He added the Federal Reserve adheres to the Phillips curve, which states that inflation and unemployment have a stable and inverse relationship
"They believe that if you want lower unemployment you have to have higher inflation, and if you want low inflation, you have to high unemployment," Forbes said. "That is a preposterous theory, but it is one that the Federal Reserve worships these days – has for years."
Forbes also insisted current inflation is higher than the 2.6% for March.
"You ask anyone who goes to a gas pump, anyone who goes to a supermarket anyone who buys lumber, anyone who buys copper can see that in the real world the prices are going up at a much faster pace," Forbes said.
"The government is mucking it up. They should have a stable dollar, but they think a cheap dollar is the way to prosperity. We should have learned from the '70s, that that leads to big trouble."
Forbes offered a simple solution to stopping inflation and reviving the economy.
"Send [the government] on vacation for 6 months," he said. "Tell them, 'You can get your paychecks just do nothing for 6 months' and watch this economy come roaring back."
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