President-elect Donald Trump's plans for fiscal stimulus are "budget-busting" and markets should be more skeptical, a leading international economist has told CNBC Tuesday.
Adam Posen, president of the Peterson Institute for International Economics and a former member of the Bank of England, said that although he is a pro-stimulus fiscal dove, he is unsupportive of the Republican's plans which strike him as "generally kind of ridiculous."
According to Posen, "The size of the fiscal stimulus…is very large, unfunded and open-ended. Most of the things he wants to do in terms of tax cuts are likely to be low-multiplier rather than high-multiplier and budget-busting rather than responsible."
Although the highly regarded economist does not have a problem with the idea of encouraging public-private partnerships, he pointed out that the private sector has deliberately chosen not to invest in recent years when it had the opportunity to do so.
In his words the focus on pushing such joint investments is"not a substitute for a responsible fiscal policy and it's not going to move the needle in a big way."