Art Laffer reacts to 6.6 million unemployment claims: Stimulus will “make the economy worse, not better”
Trump awarded Laffer the Medal of Freedom in 2019; Laffer has reportedly been pushing the White House to open up the economy immediately
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From the April 2, 2020, episode of Fox Business' Varney & Company
STUART VARNEY (HOST): I want to get back to Art Laffer briefly. Art, we do have, I think, a fourth stimulus plan, rescue plan, call it what you like, it's coming at us. You don't think it works? You don't think we should do it?
ART LAFFER (REAGAN ECONOMIC ADVISER): No, I don't. I mean, as you know, Stuart, I'm the biggest fan of this president's ever. I think he's been the best president so far in the last 50 years. I mean, really, I'm a huge fan. But this stimulus package will make things worse, not better. What we need to do is let people who work and produce keep their income, not have the government take it, and by putting that stimulus package in just like in the 2008-2009 period, and in the Great Depression, it will make the economy worse, not better.
VARNEY: I don't get it, Art. I don't get it. I don't see how massive spending, we are talking trillions and trillions and trillions of dollars, I don't see how that does not put a floor under the economy. I don't see how it hurts the economy. You explain it to me. You tell me how spending all of this money actually hurts the economy.
LAFFER: I will. Government spending is taxation. Government doesn't create resources, Stuart. They redistribute resources. Whenever the government spends $1 trillion, it takes $1 trillion from workers and producers who otherwise would — so government spending is taxation and as such, government spending will reduce the growth rate of the U.S. and will hurt the economy in bad, bad times. Now, when we are rich and when prosperous, government spending is perfect then because we can afford to take resources away from producers. But right now, we need to be the fans of producers, not the fans of consumers. I'm very sorry, but that's what has to be done now. We need free markets more than ever.