David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge

David Stockman is warning about the Trump administration's tax overhaul plan, Federal Reserve policy, saying they could play into a severe stock market sell-off.

Stockman, the Reagan administration's director of the Office of Management and Budget, isn't stepping away from his thesis that the 8½-year-old rally is in serious danger.

"There is a correction every seven to eight years, and they tend to be anywhere from 40 to 70 percent," Stockman said recently on CNBC's "Futures Now." "If you have to work for a living, get out of the casino because it's a dangerous place."

"This is a bubble created by the Fed," he said. "We're heading for higher yields. We are heading for a huge reset of pricing in the risk markets that's been based on ultra-cheap yields that the central banks of the world created that are now going to go away because they're telling you that they're done."

While I agree with Stockman on the bubble in the stock market. I disagree with him that cutting the corporate tax rate from 35% to 20% won't have any impact on the economy because you're not cutting taxes for the middle class on reducing government spending. If you make US corporation competitive again in the global economy you will see jobs being created and companies spending money in the US. So you could see something like what happened under Kennedy's tax cuts were the economy grew and tax revenue actually increased.

Also, they want to get rid of the death tax which destroys family businesses so that will be a big plus for the middle class and if they are successful in simplify the tax code that will cause growth simply because business won't have to spend a lot of money on an accountants just to show how much they should be paying in taxes.

I think David just needs to take a chill pill and take the good with the bad. Obama doubled the national debt and the fed managed to keep inflation in check. Trump could probably double it too as long as the economy is growing I doubt anyone on wall street cares and besides it's a drop in the bucket compared to the unfunded liabilities problem with have in the US.

Source: https://www.cnbc.com/2017/09/29/david-stockman-tax-reform-plan-is-pipe-dream-stocks-to-plunge-40-70-percent.html