That's how it happened on Friday morning with Larry Kudlow, the chief economist of President Trump. Kudlow turned to the Fox Business Network to boldly claim that a growing budget deficit was actually declining ̵
"The deficit, the one of The other reviews are coming down – and it's coming down fast," Kudlow claimed. "Growth solves many problems."
There is basically no publicly available justification for this claim.
The deficit for fiscal year 2017 ($ 665 billion) was actually greater than in fiscal year 2016 ($ 587 billion). , And the GOP has now passed its big trillion-dollar tax cut package and increased spending in other areas. The result? The bipartisan Congressional Budget Office predicts that the deficit will rise to $ 1 trillion a year by 2020, a figure that has not fallen since the 2009 recession.
Even if you do not consider the deficit as a raw number As a percentage of the economy as a whole – which is likely to be a better measure given inflation – it is expected to grow per CBO in the coming years and then remain stable.
Economist Stan Collender said Kudlow's claim has "no substantial justification, it's absolutely a 'trouser on fire.'
We rely on months of data and forecasts, and Republicans have increasingly pointed to past CBO estimates Who Knows What Will Happen in the Future But Kudlow Talked About It Today The last monthly statement we received from the US Treasury is until April, and despite a record surplus this month deficit was still high due to increased spending due to record tax income from equity market gains
In the first seven months of fiscal year 2018 (October to April), the deficit was $ 385 billion, up 12 percent from the same period last year While April had a record surplus, the last two months – February and March – contained the largest month deficits of Trump's presidency, each reaching $ 200 billion. Kudlow may refer to April as a sign of progress, but it is always the big month of earnings as it includes the tax day.
We do not know where it will end! Maybe Kudlow knows something we do not know! But if he does, the White House could justify the claim. At best, Kudlow seems to assume that the deficit may decline due to growth as a percentage of GDP (first graph above). But we have no data to underpin that – much less data showing that it's "fast".
And when Kudlow makes his own projection, everyone should be very careful. He promised in late 2007 and early 2008 that there would be no recession. And as fate would have it, that was exactly the question he once again answered Fox Business on Friday.