On Monday afternoon, the Congressional Budget Office released an alarming report estimating that the U.S. deficit will top $1 trillion annually beginning in 2020, with the national debt surpassing $33 trillion by 2028.
According to budget director Keith Hall, the sharp rise in debt will have “serious negative consequences for the budget and the nation.” In particular, Hall warned, “the likelihood of a fiscal crisis in the United States would increase,” thanks to the strong probability that rising deficits will bump up interest rates, increase borrowing costs in the private sector, slam stock prices, and slow down the economy, which would in turn increase the deficit even more.
And who do we have to thank for this terrifying situation? Per the nonpartisan C.B.O., “the increase stems primarily from tax and spending legislation . . . especially the 2017 tax act, the Bipartisan Budget Act of 2018, and the Consolidated Appropriations Act, 2018.”
Which, obviously, is exactly why the bill formerly known as the “Cut Cut Cut Act” had its fair share of detractors, who warned against the timing of the giveaway to corporate America and the idle rich.
But while many were scared senseless by the C.B.O.’s projections—the report notes that growth from the overhaul will “not come close” to making up for the damage done by the cuts—one man remains totally unfazed. And that man, of course, is Donald Trump’s economic guru, Larry Kudlow.
Appearing on CNN last week to explain why everyone should sit back with a stiff martini and relax, the TV pundit-turned-White House National Economic Council director told Erin Burnett, “The C.B.O., God bless ’em, their various lowball economic growth estimates last I looked . . . were slightly below 2 percent growth for the next 10 years. We don’t believe that. Our view is lower tax rates, particularly business, create incentives to invest in work ethic, and pick up productivity in wages. I would take a somewhat larger deficit in order to finance long-term growth in the economy.”
In other words, Screw the deficit. Long live tax cuts. Which, of course, is what you would probably expect a man who has spent his entire life insisting supply-side economics works to say.
But then Burnett pulled out a clip showing Kudlow in 2009 absolutely railing against deficits under Barack Obama. “The families of America take a look at this budget and these humongous deficits and the doubling of the debt and so forth and the out-of-control spending,” Kudlow moaned at the time. “This is like completely out of a line. This is the most unbalanced fiscal story coming out of Washington, really, in our history.”
And while a lesser man might have said, Well, Erin, it looks like you got me. I'll admit it—I only care about so-called fiscal responsibility when Democrats are in power and tax cuts aren’t on the line, Larry Kudlow is no such man.
Instead, he told Burnett, “The trouble I had with the Obama program was it was all spending. It was all spending and most of it was not spending for infrastructure. Most of it was spending for welfare programs and social spending. That’s not a growth prescription; it’s just spending.”