At roughly this point last year, Larry Kudlow, the director of the Trump White House’s National Economic Council, expressed his delight with the nation’s fiscal landscape. Federal revenues, he insisted, are “rolling in,” while the budget deficit “is coming down.”
Kudlow had reality backwards. Revenues were (and are) declining, while the budget deficit was (and is) growing rapidly. The top economic voice on Donald Trump’s team shared a vision that was the polar opposite of the truth.
President Donald Trump’s top economic adviser Larry Kudlow downplayed the US record national debt of $22.5 trillion on Tuesday, claiming that it’s not a cause of concern and the federal government is prepared to manage it.
“I don’t see this as a huge problem right now at all,” Kudlow said at CNBC’s Capital Exchange event. “[It’s] quite manageable.”
He also claimed that revenue analysis of Trump’s tax cuts is “coming in very well” and expressed optimism their cost has already been covered. “I would argue strongly that the corporate tax cut has already been paid for and that roughly two-thirds of the overall tax cut has been paid for,” Kudlow said.
There are three basic elements of this that are worth keeping in mind. First and foremost, the idea massive corporate tax breaks have “already been paid for” is quite nutty. The deficit is soaring, CEOs are focused on stock buybacks, and revenues are so poor that officials are starting to worry about how quickly they’ll have to raise the debt ceiling. If there’s any evidence to support Kudlow’s claim, it’s hiding well.
Second, when Barack Obama was president and the national debt was considerably smaller, Kudlow was eager to express alarm about “humongous deficits and the doubling of the debt and so forth.” A decade later, with a Republican in the Oval Office, he’s apparently overhauled his entire fiscal perspective. What a coincidence.
And finally, the problem isn’t limited to Kudlow.
Throughout the Obama era, Republicans were hysterical about the deficit and debt, using fiscal concerns as an excuse to oppose public investments, while warning the public on a daily basis about the “crisis” that would destroy the economy and impose crippling burdens on America’s children and grandchildren.
It was a tiresome scam, as Kudlow helped make clear again yesterday. As far as the Republican White House is concerned, a $22.5 trillion debt is not “a huge problem,” which is defensible as a substantive matter – there are no obvious ill effects – but it raises uncomfortable questions about why GOP officials screamed the opposite message when there was a $19 trillion debt.
Republican fiscal concerns simply weren’t sincere, though there’s little doubt they’ll magically rediscover their panic the moment the next Democratic president is sworn into office.
Postscript: Donald Trump promised voters he’d be able to eliminate both the deficit and the debt. These were among the most outlandish of all of his ridiculously false promises.