Former Director of the Office of Management and Budget under President Ronald Reagan and three-term Congressman from Michigan, David Stockman sat down for an exclusive interview with Grant’s Interest Rate Observer publisher Jim Grant
In the famed words of Lisa Simpson, how can America be broke under President Donald Trump?
“It can, and it is,“ said David Stockman on Grant’s Interest Rate Observer Radio. “And it’s been heading in that direction for the last 40 years.”
Stockman, who was a three-term Congressman from Michigan before being appointed by President Ronald Reagan as the nation’s Director of the Office of Management and Budget in 1981, served in the post until 1985.
Famed publisher of Grant’s Interest Rate Observer, and alongside Evan Lorenz, host of Grant’s Podcast, Jim Grant pointed during the interview that when Mr. Stockman left his post, the gross public debt was 1.9 trillion.
As of this morning, it now sits at nearly 22 trillion. As Grant asked Stockman, “What the heck happened?!”
“Alan Greenspan…and everyone that followed,” declared Stockman.
“The public debt was absorbed massively by central banking…creating a disease that eventually enveloped every central bank of the world.”
Stockman, who is the best-selling author of The Great Deformation: The Corruption of Capitalism in America, further explained the evolution of the fiscal and monetary policies over the last few decades.
“Before we knew it, the balance sheets of every central bank of the world which were less than 400 billion [in 1987] ended up three decades later at 22 trillion.
“It was the big fat thumb of the central banks that jumped into the bond market, absorbed this excess supply and removed the factor that kept politicians quasi-honest fiscally for the modern decades,” Stockman said.
With a fiscal and monetary of potentially biblical proportions looming, are there any measures that can be taken?
Listen to the full interview with Stockman, Grant and Lorenz HERE