Earlier today it was reported by a Washington Post reporter that Larry Kudlow had dismissed America’s 22 trillion in debt, saying it wasn’t a huge problem and that it was quite manageable:
Larry Kudlow dismisses America’s $22.5 trillion debt: “I don’t see this as a huge problem at all right now. [It’s] quite manageable.”
“I would argue strongly that the corporate tax cut has already been paid for and roughly 2/3rds of the overall tax cut has been paid for.” #debt
— Heather Long (@byHeatherLong) July 9, 2019
As soon as I saw this tweet I was suspicious because it doesn’t sound anything like what a fiscal hawk like Kudlow would say. And I was right.
Kudlow was asked by someone in the audience at a post-interview Q&A this morning on CNBC about our budget deficits, and it was to that question that he made the above remarks.
It’s cued up to the question:
Here’s my quick transcription:
QUESTIONER: On the deficit, how are you going to deal with it? It’s unsustainable.
KUDLOW: Right now the latest numbers show the current deficit is about two and a half percent of GDP. It’s a very modest number. …The deficit is coming down in the long run. I will say, Peter, as I have, there are basically only two ways to lower budget deficits. One is economic growth….and limited government, and we are pursuing both. I don’t see this as a huge problem right now. Quite manageable. …Revenue analysis is coming in very well with respect to our earliest projections of the impact of the tax cuts on the economy and the budget. Actually, 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. 2018 was year one, 2019 is year two. Give me another year or two and I think you’ll see tremendous improvement.” Right now two and a half of GDP – that’s the CBO number – it ain’t much.
Now whether or not you want to take issue with his answer about the deficit is up to you. But let’s just be honest about what he was actually talking about, because there’s a HUGE difference between budget deficits and the national debt.