White House economics adviser Joseph Lavorgna on Friday blamed an economic slowdown caused by the outbreak of the novel coronavirus for the lion’s share of an estimated $3.3 trillion U.S. budget deficit, and told Newsmax TV on Friday that he didn’t think the current climate was atmosphere to attack it.
Appearing on “The Chris Salcedo Show,” Lavorgna, the special assistant to the president and the chief economist for the National Economic Council, said with unemployment dropping nearly 2% from July to August, but still at 8.4%, that the emphasis needed to be placed on expanding the economy.
“A primary reason why these deficits look so bad is the economy was forced to shut down for six weeks,” said Lavorgna, who was the chief U.S. economist for Deutsche Bank for more than 20 years. “And when you can’t operate, you can’t have economic commerce, you can’t have tax revenues, and that explains a big part of it.
“At some point, some day, there will be a time (when) we need to address this longer-term fiscal situation, the president will do it. But now certainly isn’t the time.
“Now we need to get unemployment back to where it was before, get the job market purring even faster, getting wage growth – which was already booming, up 5% now year on year, get those trends to persist. That’s going to bring in revenues, and the economy is, a good part of it, is going to fix itself. We’ll deal with the fiscal side at some point. I just don’t think, right now, is the time to do it. It’s not prudent.”
When pressed by Salcedo about the priority President Donald Trump would place on reducing debt and decifits during a second term, Lavorgna said spending to stimulate economic growth and limiting extraneous projects are targets.
“You have to look at the spending the president has put forward, the administration has put forward in terms of needed relief to certain selected areas of the economy and not have it go to pork-barrel, wish-list type of program spending that’s inefficient,” Lavorgna said. “That the context of what you need to put the spending initiatives we’re putting forward.”
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