.@larry_kudlow: "The deficit... is coming down, and it's coming down rapidly. Growth solves a lot of problems." pic.twitter.com/H375h7rV0a
— FOX Business (@FoxBusiness) June 29, 2018
"Growth solves a lot of problems." Except that it's never grown us out of borrow-and-spend GOP deficits. Didn't happen in the '80s under Kudlow's beloved Ronald Reagan - it's why we had to do "Tax reform" in 1986, because the deficit had ballooned despite the rebound in the US economy.. But notice when we did balance the budget with growth - under the Clinton years, which had higher tax rates on the rich.
And the Bush tax cuts of the 2000s never got us back to $0. Yes, the Bubble-fueled growth of the mid-2000s cut $252 billion out of a $412 billion deficit, but look what happened once that Bubble burst. Again, it took a Democratic president to start to dig us out of the hole.
But let's humor the former coke addict, and see what's happening today. Let's go back to the CBO's projections from a couple of months ago, and compare it to Kudlow's statements. What's noteworthy is that the Congressional Budget Office is already counting on sizable GDP growth in the next 2 years.
CBO projections, real GDP growth
2018 +3.0%
2019 +2.9%
Given the 2.0% final figure for Q1 2018 that came out this week, that means the CBO is counting on 3.3% growth for the rest of this year. And even with that strong projected growth, the CBO says the US budget deficit will rise in each of the next 5 years, hitting $1.27 trillion by 2022.
And do you think Faux Business said anything to Kudlow's face calling hin out for peddling this disproven garbage? OF COURSE NOT. And you wonder why 35% of this country remains in a Bubble of misinformation?
Given that spending isn't picking up after the tax cuts took effect and that real wage growth is already at 0%, that "3% growth" estimate for the next 2 years seem like very generous estimates. If so, this projected deficit number will go higher.
There is no way to balance the budget with "tremendous growth" at this point, and that's especially true given that Boomers like Larry Judlow aren't being replaced by young people and immigrants (a hidden factor behind Reagan's and Clinton's great growth - demos were on their side).
If you truly want to balance the budget (which is debatable in itself, given that the economic damage might not make it worth it), the only ways it can be done is by taxing the rich and corporate, or cutting the daylights out of Social Security and health care programs. (Wait, you could cut the military......HAHAHAHAHA!!! Just kidding!)
But then again, there will always be plenty of Koch/GOP welfare out there to give people like Larry Kudlow a large paycheck, and continuing to claim that tax cuts for the rich will trickle down into great economic growth that lifts all of us (NOPE) and keep us fiscally stable (HELL NO). So people like me have to keep reminding you and others of the reality.
More Larry Kudlow from yesterday.
ReplyDelete"“My hope is that the Fed, under its new management, understands that more people working and faster economic growth do not cause inflation,” Kudlow said, shortly before fresh data showed inflation pushing a bit above the Fed’s 2% target."
Ummm, that's EXACTLY what should cause inflation, because of more demand. The only way it doesn't is if productivity is so high that it cranks out so much stuff that it's more than the higher demand. It also requires corporations to steal those higher productivities into their pockets, instead of paying employees more for the product (even more than we're already seeing). Good luck with that in a time of 3.8% unemployment and low population growth, Larry.
How can there be growth when most of the income goes to the richest 1%?
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