Tags: kudlow | cbo | debt | trump | tax | cuts

'Never Believe the CBO': Kudlow Doubts Forecasts on Debt

By    |   Tuesday, 17 April 2018 12:09 PM

White House economic adviser Larry Kudlow cast a heavy blanket of doubt over Congressional Budget Office's prediction that the Republican tax cuts will raise the national debt by $1 trillion during the next decade.

"Never believe the CBO," Kudlow told "Fox & Friends."

The massive tax cuts signed into law in December, which Republicans said would pay for themselves, will balloon the U.S. deficit in years ahead, the Congressional Budget Office said last week.

The deficit - the amount that Washington’s spending exceeds its revenues - will expand to $804 billion in fiscal 2018, which ends on Sept. 30, up from $665 billion in fiscal 2017, CBO said.

The national debt is on track to approach 100 percent of gross domestic product (GDP) by 2028, said the nonpartisan CBO, which analyzes legislation for Congress, Reuters reported.

“That amount is far greater than the debt in any year since just after World War II,” CBO said, adding that the debt is now about 77 percent of GDP, a measure of the size of the economy. The Republican tax legislation, passed by Congress without Democratic support, along with a recent bipartisan $1.3 trillion spending package, are expected to drive economic growth faster than initially expected, CBO said.

Kudlow held little faith in the CBO’s accuracy of predicting the economic future.

"They’re always wrong, especially with regards to tax cuts, which they never score properly because they don’t understand the growth, the incentives and the encouragements to reward success," said Kudlow, the director of the National Economic Council.

He pointed out that the CBO forecasts a two-percent growth in the economy over ten years, while the White House Office of Management and Budget predicts three percent.

"The differential over ten years on deficits is -- get this -- three-and-a-half trillion dollars in lower deficits," Kudlow said. "We’re already moving towards a three-percent growth path. I believe we will stay on that path and maybe even better."

He said this is not an attack on the CBO, but its track record on tax cuts is "not good."

Newsmax Finance Insider Stephen Moore echoed a similar theme of CBO mistrust.

"Trump didn't create $1 trillion deficits; he inherited them from the grand maestro of debt spending, Barack Obama. President Obama invented and then perfected the concept of 13-digit borrowing. His deficits in his first term reached $1.5 trillion — an Olympic record of fiscal recklessness," Moore recently wrote.

"Is there anything more hypocritical than liberals, who supported Obama's policies that ran the debt from about $11 trillion to almost $20 trillion, now fainting over runaway deficit spending?" he asked.

"The point here is that CBO's creaky computer models begin with the firm conviction that Trumponomics won't work, and then — surprise — they crank out a conclusion that Trump's policies won't work. This is what passes for rigorous analysis these days," Moore wrote.

Meanwhile, Kudlow said the tax cuts will lead to economic growth and will benefit Americans across the income spectrum.

"A rising tide lifts all boats. We are starting to see an economic boom, an economic boom that will probably be the best in a couple of decades," he said. "Every single working American, really, 155 million working Americans are going to benefit from better business, stronger growth and lower taxes."

To be sure, Trump took to Twitter to tout the economy and his sweeping tax cuts.

 "So many people are seeing the benefits of the Tax Cut Bill. Everyone is talking, really nice to see!" Trump tweeted.

(Newsmax wire service Reuters contributed to this report).

© 2018 Newsmax Finance. All rights reserved.

   
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Economy
White House economic adviser Larry Kudlow cast a heavy blanket of doubt over Congressional Budget Office's prediction that the Republican tax cuts will raise the national debt by $1 trillion during the next decade.
kudlow, cbo, debt, trump, tax, cuts
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2018-09-17
Tuesday, 17 April 2018 12:09 PM
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