Conservative economist predicts Trump will spur 'massive money printing' and soaring costs

Economist Peter Schiff is warning that the federal government's yawning budget gap will be papered over with a flood of newly printed money, and that ordinary Americans will pay for it through prices that could eventually double.

The chief economist and global strategist at Euro Pacific Asset Management laid out the math in a post on Saturday. In May, he wrote, the government spent $628 billion while collecting just $335 billion in taxes, a shortfall so large that balancing the budget would require tax revenue to nearly double. Schiff does not believe that will happen, and his prediction for what comes instead is blunt. "Since that won't happen," he wrote, "massive money printing will cover the shortfall, sending consumer prices doubling instead."

In other words, Schiff is arguing that the administration faces a politically impossible choice and will take the path of least resistance. Rather than impose a tax increase steep enough to close the gap, which he later estimated at roughly 50 percent once seasonal revenue is accounted for, he expects the government to monetize the debt. The cost of that decision, in his telling, does not disappear. It simply shows up at the grocery store and the gas pump instead of on a tax bill.

The thread drew agreement from others who share Schiff's hard-money outlook.

Where Schiff went further than some observers was on the political fallout. When one user argued that doubling taxes was "virtually impossible" and would "absolutely cause massive unrest," recommending spending cuts instead, Schiff agreed the unrest is coming either way. "Yes, but they won't" cut spending, he replied, predicting that the government "will still get unrest, but they will blame it on inflation." The implication is that the administration will treat rising prices as an external force to be managed rather than the predictable result of its own fiscal choices.