I think the inflation prospects for the U.S. over the next five or six, seven years, are quite serious. You cannot have a bumper crop in apples without the value or the price of each apple falling. The Fed has had the largest increase in the monetary base in the history of the U.S., from colonial times to the present, times ten.
Arthur LafferWhat I'm not saying is that all government spending is bad. It's not - far, far from it, but there is no free lunch, as a former colleague of mine used to say. There is no public tooth fairy. Father Christmas does not work on the Treasury staff this year. You can never bail someone out of trouble without putting someone else into trouble.
Arthur LafferWith the shrinking of the US economy, and it's shrinking very rapidly, you not only have more money, but you also have fewer goods. That's a classic double-whammy on inflation.
Arthur LafferYou know, without China there is no Wal-Mart and without Wal-Mart there is no middle class and lower class prosperity in the United States.
Arthur LafferLet's take the nine states that have no income tax and compare them with the nine states with the highest income tax rates in the nation. If you look at the economic metrics over the last decade for both groups, the zero-income-tax-rate states outperform the highest-income-tax-rate states by a fairly sizable amount.
Arthur Laffer