Larry Kudlow: Biden admin doesn’t believe its policies will actually work

I want to make a couple comments about the Biden budget. I absolutely love the headline from Reason magazine: “The White House Claims Borrowing $16 Trillion Over the Next Decade Is Fiscally Responsible.” 

So, that is point number one. Since when is $16 trillion fiscally responsible? Then, the subhead is even better: “If you can’t even get close to balancing the budget when unemployment is low, tax revenues are near record highs, and the economy is booming, when can you do it?” 

So, that’s point number two. Treasury Secretary Janet Yellen – who is a very smart, experienced, and accomplished public servant – was kind of dodging my friend Edward Lawrence today on the issue of tax hikes damaging the economy, falling real worker wages and the problem with all that borrowing, but one generic point I want to make is that the Biden budget doesn’t even bother to show balance at the end of the 10-year window. 

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Not even a phony path to a budget balance. Not even ginning up outrageous growth projections or collapsing interest rates. I mean, the Bidens aren’t even good socialists. Here they are touting the efficacy of huge spending and huge tax increases and huge regulatory burdens, but they don’t really produce the goods in their own numbers. 

I mean, if you really believe this stuff, you should probably show 4-5% economic growth and a balanced budget in 10 years. Heck, even 5 years, but what their budget does show me is they don’t believe their policies will actually work. 

Of course, I don’t believe their policies will work, either. You’d think, if you really bought into the big government socialist model, that you’d build in some good rosy scenarios in the budget, but they don’t. 

I mean, down through the years, most administrations – in both political parties – show a balanced budget over 10 years. A fiction, yes, but a useful fiction. Even a disciplinary fiction, but not the Bidens. The Biden OMB baseline shows a combined deficit increase of $19.5 trillion and the level of debt in public hands is $28 trillion in FY ’24 and $49.8 trillion in FY ’34. That’s an increase of $22 trillion. 

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These are gigantic numbers and they could never possibly pass for something called “fiscal responsibility,” which is how the Biden factsheet describes their policies. There are no wars. No national emergencies. No pandemic.  

No nothing – except record spending and tax revenues, and deficits and borrowing and, of course, no spending cuts to be found. As Reason magazine asks, “If you can’t even get close to balancing the budget under those conditions, when can you do it?” That is my question and that if my riff. 

This article is adapted from Larry Kudlow’s opening commentary on the March 13, 2024, edition of “Kudlow.”