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Former Fed Chair Paul Volcker takes Trump to task on taxes, trade

Reuters 

By Jennifer Ablan

(Reuters) - Former Federal Reserve warned the Trump administration's handling of domestic issues as well as trade talks with is hurting the United States' long-term prosperity.

"We have not been on a constructive track," Volcker told Ray Dalio, in a podcast video released on Tuesday. "I think that's fair to say."

Volcker, widely credited with ending the high levels of inflation seen in the during the 1970s and early 1980s, said Trump's big tax cuts and spending increases underscore the lack of transparency of the president's administration.

"We rammed through a massive tax bill. Whatever you think about that tax bill, it shouldn't have been rammed through without any debates at midnight on Dec. 31," Volcker said.

On Dec. 22, 2017, signed the Tax Cuts and Jobs Act, shrinking the corporate tax rate from 35 percent to 21 percent and cutting taxes on private businesses by about 20 percent. It was passed without a single public hearing.

Volcker cites Alexander Hamilton, his of the Treasury, as saying "the true test of good government is its ability to administer" which Volcker said "we lapse in."

Trump has had a strained relationship with the Federal Reserve. As Fed rate increases continued through last year, Trump called the central "crazy," out of touch with markets, and according to reports, explored whether he could remove current Fed

Volcker said the trade negotiations have been particularly worrisome for the United States' future over the next 10 years.

"It sounds terrible but I respond more favorably to what the of is saying than the of the United States," Volcker said. "The president of China, at least, says he's looking over time...But looking for peaceable outcomes, where we are all threats and demands, so it's a different story being told."

U.S. and Chinese officials expressed hopes on Monday that a new round of talks would bring them closer to easing their months-long trade war. and are trying to hammer out a deal before a March 1 deadline, without which U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.

All told, Volcker said: "Faith of the people in our government today is really distressing. There's been polls taken every year that ask the same question … Do you trust your government to do the right thing most of the time? You get maybe 20 percent to say 'yes.' You ask about the Congress, it'd be less than 20 percent. It's no great secret that we are torn about by ideological and other differences now."

(Reporting by Jennifer Ablan; Editing by Lisa Shumaker)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, February 12 2019. 11:12 IST
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