Larry Kudlow on the U.S. Economy: We’re Crushing It

Larry Kudlow, the director of the National Economic Council, said on Monday that the Trump economic boom is the most important story in the world today.

“The U.S. is the hottest economy in the world today. We’re crushing it,” Kudlow said in a talk at the Economic Club of New York.“The single biggest story of this year, 2018, the single biggest news story – not fictionalized versions of what’s going on in the White House – the single-biggest story is an economic boom that virtually everybody thought impossible.”

China Tariffs

Kudlow said he expected an announcement on new tariffs on Chinese goods soon but declined to provide details.

“The president has suggested tariffs on a couple $100 billion,” Kudlow said. “He has not been satisfied with the talks with China on this. I think the basic stories are more or less correct. My guess is that an announcement will be coming soon.”

Kudlow said that tariffs may be “a force for good.”

Deficits

Kudlow said that tax cuts were not to blame for the growth of the federal government’s budget deficit.

“We have to be tougher on spending,” Kudlow said. “People are quick to blame deficits on tax cuts, but I don’t buy that.”

He predicted that the U.S. government would run deficits equal to about 4 percent to 5 percent of GDP for the next year or two.

“I’d rather it were lower but it’s not the biggest thing in the world. It’s not a catastrophe,” Kudlow said. “Growth solves a lot of problems.”

Blue Wave a Threat to the Economy

Asked about the possibility of Democrats taking the House in the midterm elections, Kudlow said it “would be a shame” if Democrats attempted to overturn Trump’s economic policies.

“I think that argument is going to figure very heavily in the November elections,” Kudlow said.

Kudlow said he did not think the so-called Tax Cuts 2.0 plan, which would make cuts to personal income tax permanent, would pass before the midterm elections.