Larry Kudlow on Budget & Economy



Fact check: No, Trump didn't inherit stagnant economy

Trump's top economic adviser, Larry Kudlow, claimed that Trump, when elected, was "inheriting a stagnant economy on the front end of recession." That is false. Looking at the broadest measure of economic health, gross domestic product, the numbers show that average quarterly economic growth under Trump, 2.5 percent, was almost exactly what it was during President Barack Obama's second term, 2.4 percent.
Source: NBC News Fact-Check on 2020 Republican Convention speech , Aug 25, 2020

$6.2 trillion in aid; we think we can get through this

We've got a $6.2 trillion assistance package. We're trying to keep folks working. And we're also protecting payrolls. It may not be perfect but I think it's going to give tremendous amount of resources to get us through what we still believe is going to be a question of weeks and months--hopefully weeks--maybe I should say prayerfully weeks. But we think we can get through this period. It's the largest mainstream financial assistance package in the history of the United States.
Source: ABC This Week 2020 interview of Trump Cabinet , Mar 29, 2020

We're going to stay with Trump pro-growth program

First of all, I don't see a recession at all. Second of all, the Trump pro-growth program, which I believe has been succeeding. Lower tax rates, big rollback of regulations, energy opening, trade reform, we're going to stay with that. We believe that's the heart of the free enterprise. We want an incentive-oriented supply-side economy, providing opportunities for everybody across the board.
Source: Fox News Sunday interview for 2019 Trump Cabinet , Aug 18, 2019

FactCheck: No, deficit is increasing with Trump tax cuts

In June 2018, Kudlow asserted that the tax cut was generating such growth that "it's throwing off enormous amount[s] of new tax revenues", and "the deficit, which was one of the other criticisms, is coming down--and it's coming down rapidly". Both assertions were incorrect. Since the tax cut was enacted, federal tax receipts increased 1.9% on a year-on-year basis, while they increased 4.0% during the comparable period in 2017. By the same method, the federal budget deficit increased 37.8% while it increased 16.4% during the comparable period in 2017. Kudlow later asserted he was referring to future deficits, although every credible budget forecast indicates increasing deficits in coming years, made worse by the Trump tax cut if not offset by major spending cuts. Barring such spending cuts, the CBO projected the tax cut would add $1.27 trillion in deficits over the next decade.
Source: Wikipedia.com Fact-Check on 2018 Trump Cabinet members , Dec 31, 2018

The massive federal stimulus of 2009-10 did not work

We need a pro-growth, supply-side fix. The current economic recovery is sub-par. In fact, at roughly 2% average real growth over the past five years, it's the slowest rebound since World War II.

A few brief observations: First, the massive federal stimulus of 2009-10 did not work. There were no so-called fiscal multipliers. And far too much debt was accumulated for no good reason. Second, substantial overregulation has continuously hobbled the recovery. Tax rates have gone up across-the-board. The Dodd-Frank financial regulation has not solved Too Big to Fail, but it has contributed to an abnormally slow increase in C&I loans, particularly in the middle market.

I do applaud the slowdown in federal spending, which has dropped from over 24 percent of GDP to below 21 percent. At least this gives the private sector more room to breathe. Large-scale budget reductions in 2011 and 2013 did not crash the economy or the moderate jobs recovery, as my Keynesian friends widely predicted.

Source: National Review, "Recovery: 5 Years", by Lawrence Kudlow , Jul 15, 2014

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Page last updated: Aug 31, 2021