Peter Schiff, Euro Pacific Capital, on Economic Growth

And. -- -- Welcome back into the financial exchange on Tuesday July 3 it is a gorgeous Tuesday morning I think we're gonna have -- somewhere in the ninety's today. And we just spoke with any single from Bloomberg and we talked a little bit about some of the weakness that we have been seeing. In this economy over the last couple months in particular seeing some disappointing news coming out from manufacturing yesterday -- has really been a driver of this economy over the last couple years so. June -- it seems like there's a lot to for people to be concerned about right now and this is just another piece of the puzzle that kind of gets added in there. I know and and you know -- Diane asked you to. OK so we're halfway through the year we're half way -- through -- -- -- hard to believe right so checked with this a good time. To maybe sit back I mean I know tomorrow's the fourth -- gonna go to parties but. May be reviewed the portfolio made me take a look at your bank accounts may be looked to see what you've got it invested and so forth and so right this is a good time to maybe. Reflect on all of this. Yeah absolutely and typically you know for the average consumer take a look at your portfolio on and twice a year you know a lot of a lot of folks do it you know maybe right around taxi when they're doing their taxes. And then also towards the end of the year maybe is there looking into fiery contributions and things along those lines so that's that's a pretty good benchmark but. Joining us now -- to talk a little bit about. Some of the ways to stimulate the economy going forward and really what we need to do to get this economy back on track we have Peter Schiff from Euro Pacific Capital Peter how are you today. I'm doing pretty well so let's let's get into this article that you wrote it's from June 22 it's up on your web stated Euro -- dot net and in your article you discuss the different ways that we can go about stimulating the economy at the moment so. Businesses right now just seem to be paralyzed by the uncertainty that we have so what are the biggest stumbling blocks. To businesses investing right now. Well personally know -- -- -- -- track for a long time we don't people wanna try to return aren't the economy. To what it was before the financial crisis because it was all flat reckless spending and consumption and -- that. Led -- demise are led to this financial crisis. So we understand that the the biggest stumbling block to real economic growth is that interest rates are too low and that the US government is too big. And so what we need to do is dramatically reduce the size of government through our substantial -- in the -- by the government spends. We also need to repeal all sorts of regulations. That stifle economic growth -- that inhibit. You know businesses from expanding -- coming into existence. And we need to get the -- federal government Federal Reserve rather to stop trying to artificially stimulate. Consumption. By eight. With low interest rates interest rates have to be allowed to rise so that what we do is stimulate the music because we savings to give apple investment. When he capital investment to create jobs we need all that to grow the economy right now all we're trying to do is Reese play the Bob -- and it will not work. And so looking at this situation that our countries and obviously as you mentioned we have an unsustainable amount of debt so. How do we deal with this though in in terms of you know not taking away the growth that's contributed by government spending is obviously the money the government spending if they're borrowing it. Is it gonna be spent otherwise it was the case where we kind of have to take our medicine now and problems organs. Spending is -- contributing economic growth it's actually subtracting from economic growth. We we need to grow the economy we can't do that big government is taking all the resources. That would otherwise be invested productively. And spending it on government programs that you -- -- secure part of the GDP. Is government spending that doesn't represent actual quote. One dollar and all of that money are dead as increasing -- five times faster than the GT. So we're spending ourselves in the poverty. No we're not gonna spend ourselves -- people ought to understand the government doesn't have any money. So whatever by the government spends -- -- -- the private sector beef -- and spend it if the government borrows the money. That's money that it's not available to finance legitimate economic growth in the private sector so what we're doing is we're trading prosperity and economic growth and good jobs for more government. And that's a -- trade. So a -- your opinion and let's let's look at the next twelve to eighteen months and try to take. -- look at that time period what's the best thing that the government can do over that time period in order to try to encourage real economic. And get out of the way you -- this is also a small burden is possible. On the productive sectors of the economy. And that means slashing spending and regulations. But we have to understand is that government has already done so much damage store economy. That there's going to be a lot of short term pain. Associated with any. Real recovery because a lot of people -- now living off of government. Are going to have to get used a lot less money or other people who are working for governor have to get real jobs in the private sector. And for those people it's going to be a painful transition. Mode a lot of Americans who have been paid in the deal it's going to be a big relief. Yeah and certainly we've seen. What a number of proposals in particular the Bowles Simpson commission last year coming out with some some pretty concrete recommendations but unfortunately nothing enacted yet with congress a little paralyzed based on what we've seen so far so. -- have to take a look and see if any of that to actually be implemented. Over the next couple is -- wanna thank you for for joining us today appreciate your insight. Yeah Adam Leon you know I -- all this in my new book the real crash America's coming bankruptcy how to save yourself your country which just came out about a month ago. All right well if you're if you're looking for something to read on the fourth of July if you have a couple -- it's definitely take a look at Peter's new book if you wanna take a look at that article. It is up on Euro -- dot net thanks again Peter.