Economist and gold investor Peter Schiff says the ongoing U.S. government shutdown is exposing deeper problems in the economy that President Donald Trump can’t fix through tariffs or political gimmicks.
In his episode of The Peter Schiff Show, Schiff called the shutdown mostly symbolic.
“The main problem with the government shutdown is that they don’t shut enough of the government down,” he said.
Schiff argued that most agencies keep running while taxpayers continue footing the bill.
He described the standoff in Washington as political “theater,” since shutdowns always end and the same spending patterns return.
According to Schiff, the real fight in Congress, whether to extend Obamacare subsidies first introduced during the COVID emergency, shows how temporary aid often becomes permanent.
He said Democrats are defending subsidies that were never supposed to last, and Republicans are pretending to draw a fiscal line too late.
“Everything that’s temporary in Washington becomes permanent,” Schiff said.
Weak Jobs Data Hidden by Shutdown
The shutdown also delayed the monthly jobs report, something Schiff said likely worked in Trump’s favor.
The private ADP employment report showed a loss of 32,000 jobs in September and a revised loss of 3,000 in August.
“That’s back-to-back negative numbers for ADP,” Schiff noted, adding that such figures usually appear during a recession.
He said the missing jobs report would have embarrassed the Trump administration. “So, you know, the Trump administration was spared the embarrassment of a horrible um, non-farm payroll report.”
Despite weak labor data, the Dow Jones Industrial Average closed above 47,000 for the first time, which Schiff dismissed as “the illusion created by inflation.”
When measured in gold, he said, the Dow has fallen 33% in two years and 70% since 2000.
Gold, Silver Surge as Inflation Erodes Value
Schiff highlighted that gold ended the week near a record $3,890, while silver climbed above $48.
“The Dow dropped by 33% in terms of honest money,” he said, referring to gold as the only real measure of value. He urged listeners to buy precious metals, claiming weekend rallies are becoming common. “If you wait till Monday, it’ll be more expensive,” he said.
Criticism of Trump’s Economic Policies
Schiff turned his attention to Trump’s new health care initiative, a website called Trump RX, which partners with drug companies to offer lower prices.
“There’s no way that Pfizer voluntarily did anything,” he said, arguing that the company agreed to price cuts only to avoid a proposed 100% tariff on imported drugs.
Schiff called the plan “extortion, not capitalism,” and said it sets a dangerous precedent for government involvement in private markets.
He also blasted Trump’s tariff plans, including his proposal for a 100% tariff on movies filmed abroad.
Schiff said the idea “just shows you Trump doesn’t even understand what the hell tariffs are,” explaining that tariffs are paid by Americans, not foreign countries.
He warned that such policies would raise costs for consumers and hurt industries where the United States still has a trade surplus, like entertainment.
Hollywood Hypocrisy and the Bigger Picture
Schiff criticized Hollywood actors for embracing anti-capitalist rhetoric while earning large sums under the very system they criticize.
He said even Trump, who once thrived under free-market conditions, doesn’t seem to understand capitalism either.
Ultimately, Schiff said both the shutdown and Trump’s policies are distractions from the deeper issue of a weak, inflation-driven economy.
“The government wants you to think you’re getting richer,” he said. “You’re not getting richer. The numbers are getting bigger because the money is getting smaller.”
IMAGE CREDIT: “Peter Schiff” by Gage Skidmore, via Flickr. Licensed under CC BY-SA 2.0. Image adjusted for layout.