Art Laffer on negative rates: I'd borrow as much as I could if I didn't have to pay interest

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Economist, Art Laffer is pictured in Washington, DC on Sunday, March 8, 2015.

Sarah L Voisin | The Washington Post | Getty Images

Economist Art Laffer, a supporter of President Donald Trump, warned on CNBC on Thursday about the moral hazard of having the negative interest rates seen across Europe and in Japan.

“If I could borrow without paying any interest, or ever paying the money back, I would borrow as much as I could, too,” said Laffer, a former economic advisor to Trump and former President Ronald Reagan.

However, Laffer said that ballooning budget deficits in the U.S. are not a problem because interest rates are so low.

“Right now, there’s no real problem for having these deficits,” he argued. “When you have interest rates at 1.6% on the 10-year [Treasury], the expense on the interest of the national debt as a share of GDP is extremely low.”

“There is no penalty. The government is paying for it,” the “Trumponomics” co-author added. 

This is a developing story. Please check back for updates.

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