Cortez predicted two possible scenarios that both have recessions as their endgame. "Either [the Federal Reserve] continues to raise interest rates and we go into a recession – like a short-term recession – or we go into a massive inflationary period," he told Witzke, who was filling in for regular host Stew Peters.
"I mean, inflation hasn't been as high since literally 40 years ago. People couldn't afford a slice of bread, they can't afford gas … [and] basic necessities. And we have this president that can't even climb upstairs. What makes you think he can help the [Federal Reserve] do [its] job, or even the economy?" (Related: The Federal Reserve hides price inflation, but why?)
According to Fox Business, Biden proposed the tax hikes as part of his $5.8 trillion federal budget plan for the fiscal year 2023. The president's March 28 proposal sought to raise taxes by $2.5 trillion, against a $1.15 trillion deficit. Top earners in the U.S. would bear the brunt of these taxes which include a steeper corporate tax rate, a modified wealth tax and a global minimum tax.
Biden defended the budget by arguing that it "makes prudent investment and economic growth [and] a more equitable economy while making sure corporations and the very wealthy pay their fair share." He added: "We are reducing the Trump [administration] deficits and returning our fiscal house to order."
The proposed tax hikes sought to galvanize Democratic lawmakers in both chambers of Congress. However, it remains unknown if Democrats will approve Biden's plan.
The financial planner said the tax hikes will have a "trickle-down" effect. "What that means is when we have rising interest rates … [alongside] a volatile stock market, it's very difficult for Joe the plumber to actually walk into a bank and basically get a loan. [With] tax rate hikes, it's a trickle-down effect."
The wealth manager added: "We also have this mortgage situation going on, with home sells declining and home prices going up. So it's very difficult for a first-time home buyer to actually get a loan. It just causes a massive wave through every sector in the financial industry and, as you know, the [Federal Reserve] is always late to rising interest rate."
"I don't have a crystal ball and I'm definitely not a real estate expert, but I do know it's a supply and demand issue. There's not a lot of inventory. What's interesting is that home sales have been going the past quarter [and] aren't getting better. It really depends on these interest rake hikes because, like I said – if first-time home buyers can't get a loan, then that really hurts the housing industry. So we're going to have to wait and see what real estate holds for 2022."
Nevertheless, Cortez mentioned there will be a "correction" that will bring prices downward.
"The stock market is down [by] 20 percent. Even gold is down [by] seven percent, Bitcoin's up [by] 28 percent. But as real estate subsides, it's like elasticity in a rubber band; the prices have to come down, for sure. It has to."
He ultimately pointed his finger at the "idiotic president" Biden for bringing the U.S. economy into "uncharted waters."
"This is just the bad, bad policy decisions that they make in Capitol Hill with this approval of Joe Biden. This is what we get when we're in bed with China. And then, you're going to see a lot of false flags with Ukraine. You're [going to] see financial false flags coming down, because they're trying to distract [us] away from the real problem."
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Watch the conversation between Lauren Witzke and Carlos Cortez Jr. over the effects of Biden's proposed tax hikes below.
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