Futures Now

Trump's massive infrastructure, defense plans will lead to ruin, Ron Paul says

Ron Paul: A 'downturn' will happen under Trump
Ron Paul: A 'downturn' will happen under Trump
Market suffering bout of ‘indigestion’: PNC
Market suffering bout of ‘indigestion’: PNC
History suggests Trump rally will resume: PNC
History suggests Trump rally will resume: PNC

For all the fanfare that greeted President Donald Trump at his inauguration on Friday, the next four years of his presidency could very well be marred by a weakening economy as a result of "injurious" policies.

That's according to past Texas Congressman and former presidential candidate Ron Paul, who joined CNBC's "Futures Now" last week to echo his past sentiments about the new president.

Most notably, the well-known Trump critic believes that the President's proposed plans could overspend the economy into trouble and drive the Federal Reserve to interfere.

"With his massive increase in infrastructure and the military, I think there's going to be a lot more spending," said Paul. "The debt is going to be much bigger [and] I think that will put more pressure" on the Federal Reserve, he said, with the central bank already planning to tighten interest rates.

"You have good times, and then you have bad times to compensate for the artificially good times," he added. "So we'll have a downturn and that will be a real challenge for the new administration."

Ron Paul
T.J. Kirkpatrick | Getty Images

Although most of Wall Street appears bullish about the short-term economic outlook under Trump's fiscal policy plans, some economists have been less than sanguine. Paul's critique echoed that of David Stockman, a former Reagan-era budget director who also warned CNBC last week that Trump's plans would ultimately lead to financial calamity.

Paul had refused to endorse Trump from early on in the election cycle, claiming that the now President would divide the Republican Party. Much of Paul's criticism of Trump lies with the latter's proposed border taxes, which Paul believes is actually more of a "tariff" that would block free trade.

"I think that right now, I'd fear most the retaliation [from other countries] and the burden it's going to place on the consumer," said Paul.

The markets turned somewhat lower Friday as Trump began his post-inauguration speech.