Reagan adviser Laffer 'willing to accept the higher risk' of dying from coronavirus to open economy
Laffer could head up President Trump's task force to restart business after coronavirus subsides. 'I do not want to sacrifice their opportunities going forward, just to have me live another week,' Laffer said of his children and other descendants.
Economist Arthur Laffer will turn 80 in August, and as an older male, he's in an endangered demographic for catching the coronavirus. Data from New York, Italy and China suggest men are possibly twice as likely to die from coronavirus than women, due to weaker immune systems and more underlying health problems and behaviors like smoking.
Laffer, who advised former President Ronald Reagan, is reportedly under consideration to head a possible new task force aimed at re-opening the U.S. economy as soon as possible after containment of the coronavirus.
Laffer said in a recent interview with Just the News that the government's widespread shutdown of society to slow the spread of coronavirus was medically necessary and fit within "reasonable limits," but reopening the economy should be based on calculated, fact-based risk rather than irrational, widespread fear.
"What they should do is try to get the economy back as fast as possible in a medically-safe way and get this pandemic over with," he said. "Now when you look at it, when you look at the numbers for the pandemic, where are all the deaths? Over half the deaths are 65 and older. We know where the real problems are medically. Should other people be required not to work if they are not at risk?"
Laffer, who earned a Phd. in economics at Stanford University, was an adviser to Trump’s 2016 presidential campaign. Trump awarded Laffer the Presidential Medal of Freedom last year.
"Let me tell you how I feel," Laffer said. "Now I'm 80. I've got six children, 13 grandchildren, and I have four great grandchildren. Really cool people. People I love more than life. I am perfectly willing to accept the higher risk of mortality, of dying, if I can feel better about their economic futures going forward. I do not want to sacrifice their opportunities going forward, just to have me live another week. We have to be very careful about the tradeoffs and make damn sure you don’t ruin the country’s future. That's what smart people do."
Laffer acknowledged the pain felt by millions of Americans as businesses, schools, houses of worship and other public venues shuttered in mid-March and are likely to remain closed at least through the end of April.
"Everyone is suffering from this pandemic, all the way across – in economics, in physical terms, family cohesion," he said. "Child abuse is way up, suicides are way up. There are all sorts of ways this virus is doing a hell of a lot of damage to our society and to our economy. They have a perfect right, role and responsibility to respond to that pandemic."
With staggering unemployment figures mounting, including 6.6 million more new unemployment claims last week, Laffer says the government shouldn't make one-size-fits all decisions about who should go to work and who shouldn't since people's circumstances vary greatly.
"Males have much more likelihood to get the coronavirus and have it be serious than are females – that’s a fact," he said. "And if these facts are rolling out, you use them to make good decisions. That’s what scientists do. And that’s what the government should do ... . You know, you’ve gotta use brains. I do understand keeping 80-year-olds, me, out of work, that I understand totally."
Laffer is wary of the $2.2 trillion coronavirus stimulus package adopted last month, worried it could have the opposite of its intended effect and in fact slow down the economy by discouraging workers from re-entering the workforce.
"It is not compassionate to give away other people’s money," Laffer said, referring to redistributing money rather than creating economic growth. "Let me just give you the dimensions. That’s a $2.3 trillion stimulus package, we’re running well over a trillion dollar deficit now. Well over, probably a trillion and a half. Let’s say we add the two together, we get $3 trillion. Then they’re planning another $2 trillion one. You add all that together, you got $5 trillion. The U.S. GDP is $20 trillion, let’s say. It’s a little less than that. Five trillion over $20 trillion, 25%. Already our national debt, as a share of GDP is 82%. After this little round of spending within the year, our debt will be 115% of GDP. Which puts us up in the upper echelons of countries with the most debt in the world, that are the slowest growing, the most stagnant countries. Is that what you want?"
Laffer said members of Congress should take a pay cut just as millions of Americans are feeling economic pain as the economy contracts due to coronavirus.
"Look at Congress. What’s happened to their pay?" he said. "This whole big stimulus package, they’ve taken taxpayer money and they’ve given to all sorts of people around as goodies. That’s all they've done. Has Congress shown its solidarity with the rest of people and cut their pay by 15%? Have they? Hell no."
Larry Kudlow, director of the White House's National Economic Council, said Thursday that a decision has yet to be made on whether to create a task force on restarting the economy.
President Trump and many lawmakers have called for infrastructure spending to be part of any future coronavirus stimulus package, and Laffer thinks the president is correct that America needs some new infrastructure projects. However, he's worried about how hurried the analysis is to date.
"I’m not critical of an infrastructure package," he said. "I am critical of an infrastructure package that is precipitated by a stimulus motive. If you need a new bridge, we sure as heck need to put in a new bridge. But it shouldn’t be dependent upon the state of the economy, up and down coronavirus, or anything like that. It really shouldn’t."
However, Laffer acknowledges having not researched infrastructure enough to give precise recommendations right now.
"I have not looked at it in a detailed technical way," he said.
Just 13 percent of registered voters said infrastructure was their top spending priority for a new coronavirus stimulus, according to the Just the News Daily Poll with Scott Rasmussen released Thursday. Registered voters in the Just the News poll placed "medical research and prevention" (36%) and putting "as money as possible into the pockets of Americans hurt by the downturn" (28%) as higher spending priorities.
Laffer repeated his suggestion he's frequently made elsewhere – that a payroll tax cut would be a much better approach to encourage businesses to hire and keep employees and for workers to remain employed.
Trump has said repeatedly he wants a payroll tax cut in any future coronavirus stimulus package. Such a cut was proposed by congressional Republicans but blocked by Democrats in the $2.2 trillion stimulus law signed by Trump in March. Democrats have said they supported such a cut a decade ago but did not believe it provided enough impact.
"Frankly, it’s not a Democrat or Republican issue. It’s common sense economics," Laffer said of a payroll tax cut. "I have no bone to pick with Schumer or Pelosi. I have a bone to pick with bad policies."