Tags: Trump Administration | kudlow | socialism | prosperity | poverty

Kudlow: 'Loser' Socialism Lacks Prosperity, Causes Poverty

By    |   Wednesday, 24 April 2019 05:49 PM

White House economic adviser Larry Kudlow warns that socialism is a “loser” ideology, only fostering poverty and not prosperity.

Sen. Bernie Sanders, I-Vt., who is at the top of current polls for the Democratic nomination, identifies himself as a Democratic Socialist. Policies he and other prominent Democrats tout are often referred to by Republicans as being socialist.

“I will say this, socialism is a loser. I don’t want us to forget the lessons of the past,” the veteran financial guru and former Ronald Reagan adviser recently told the National Press Club.

Kudlow said socialist economies throughout history have failed. “They sap our morale, they reduce our freedom. They tend to turn into really tyrannical political situations,” said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.

“But most of all, from my standpoint as an economics guy, they don’t have prosperity. They generate poverty,” said Kudlow, assistant to the president for economic policy and director of the White House’s National Economic Council.

“We are at the beginning of a new prosperity wave in this country. We are the hottest economy in the world. Confidence is building,” he said. “Why would we want to pursue policies that could — I think in total — slice 15 percent of GDP right out within 10 years?”

“I am an ex-Democrat. Actually, I have worked for two presidents who were ex-Democrats, Ronald Reagan and Donald Trump,” said Kudlow, who served as the Trump campaign's senior economic adviser.

Meanwhile, the head of the International Monetary Fund on Thursday panned an idea gaining currency in U.S. left-wing circles that Washington could borrow much more aggressively without harming the economy, Reuters reported.

Prominent politicians including Sanders, a self-described democratic socialist seeking the 2020 Democratic presidential nomination, and Democratic U.S. Representative Alexandria Ocasio-Cortez see the idea as a possible way to ramp up spending on social programs.

The theory, known as modern monetary theory, has drawn rebukes from fiscal conservatives and many Democrats as well.

IMF Managing Director Christine Lagarde, whose institution is tasked with rescuing countries stricken by economic crises, appears to be aligned with critics who consider the theory naive.

“We do not think that the modern monetary theory is actually the panacea,” Lagarde said at a news conference during the spring meetings of the IMF and World Bank in Washington.

Lagarde said there might be a few situations in which vastly expanding debt would make sense, such as when a country gets stuck in a deflationary spiral.

“We do not think that any country is, you know, currently in a position where that theory could actually deliver good value in a sustainable way,” she said.

Conventional economists across America’s political spectrum argue the country is already on an unsustainable fiscal path with $22 trillion in outstanding federal debt and chronic deficits driven by social welfare programs.

Proponents of modern monetary theory hold that the U.S. government’s monopoly over dollar issuance - the printing press - gives it the power to spend as much as needed to meet the full employment and inflation mandates currently tasked to the country’s central bank.

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White House economic adviser Larry Kudlow warns that socialism is a “loser” ideology which only fosters poverty, not prosperity.
kudlow, socialism, prosperity, poverty
Wednesday, 24 April 2019 05:49 PM
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