Larry Kudlow (CNBC, Budget Deficit)

Larry Kudlow (CNBC, Budget Deficit) by The Financial Exchange

00:07:27

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

The budget deficit was 566. Billion dollars about 11% larger than the same period time last year did it. Or a desk Larry about that and have a conversation about budget deficits Larry welcome to the show. Larry eight I was just talking to talk about the F 43 billion dollar budget deficit in July. I think I is 566. Billion. Over the last ten months. Help us get over the fear of budget deficits going forward widget. Well. If you're an. Yeah about three. For Internet strategy paid you know public. Most of the budget deficit. Believe it or not. You know coming from. As long term trend. Up our economic growth and he cannot balance the budget. But let the economy is growing to a maximum potential. For example. In the last let's say ten years. We've been growing at 33 and a half or 4%. Two. Get pretty close to a balanced budget honestly because the actual spending. Has not been a problem I mean believe it or not. Once you have the obamacare. Stimulus package. Which was book called quote to a trillion dollars. It lasted two years some such yup. And their crew on away. And spending that has been around 20% of GDP. Which is pretty good. Devote their forever. You'd probably you know like that that was killed so I'm I'm just saying. The principal cause of the deficit if you're not getting enough revenues could have a of growth. Ever at. Taxable income. And I can only be fixed in my view. But I. It's kind of died in the economy and that's another reason he had me. Why this corporate tax cuts got to go through people's well let's which you'll say well I wouldn't it means a lot yeah it means a lot. Well in and running a deficit is not the worst thing in the world isn't in me that don't lead. And that that's sort of trying to emphasize it and the difficulty here Larry is for the last eight years Republicans were thrown rocks at Democrats for running up the deficit. I think we should anticipate that during the next few years were probably gonna increase the deficit went. You maybe not millions out and I think it. I don't like even use CBO numbers but I think it does go up and I think it right itself and that a five or 600 billion dollar area. But it's. It's fairly. About three again three to 4% GDP I mean if I dropped the ball I don't love it. Year you're standing in nations debt. But on the other hand. It's not failure it. Too much attention is given to the deficit Irsay and knotted up at the underlying factors. Are going to habitat. You know and again I come back to this point grossed almost budget. All the time at the way to do. So he'd need to regain you're broke and yet of course you need to limit spending I agree with that but I just think it. I've been out there and Obama is except that crazy stimulus package but all of its fiscal multiplier is supposedly what didn't work. The Republicans kind of shut them down on that and no conservatives say you'll you'll spend too much. But the reality is about 12% GDP now believe. Almost. Where are they with tax reform now learn any news. Well yeah we had they did last night with respect Kevin Brady chairman of the Ways and Means Committee. And are. Our committee to unleash prosperity and old I can resolve the record dinner but I say that is very optimistic. Good back he he would rather optimistic about the entire package. Both the individual side and the business side now whether that it out. Remains to be seen but then how to do it well. They're gonna have a marked up fairly soon. And have got to restore. September early October or something like that go he said he was optimistic about it. I can tell you Larry and I did I'd give you this information for what it's worth it the man on the street you're next door neighbor my next door neighbor. They want to see. Comprehensive return in that reform including personal tax reform I think they're going to be upset. And I know you are a proponent of doing corporate tax reform that's the priority but I can tell you just. From that the emotional standpoint. You guys need to recognize we want the personal tax reform simultaneously. Well it again that it would be terrific. All four I don't know if you go. The that Kevin Brady. Chairman of the Ways and Means Committee last night that we would get personal. And that was doable I think this permissions in the senate. But it's doable period of time to do it by the end of this year or the first quarter of this year there is time. Well there get better but I will argue. Particularly we're trying to four million small businesses out there no doubt about that is a personal tax cut. Good effect. Self employed LL please and so forth. I've got a big business income but that amounts to a personal tax cut as well but sure you watch the whole package couple of corporate. Anyway without giving the white too many. A point that Kevin was an optimist is very. Good good Larry thank you very much for your time we appreciate it thank you Larry Kudlow senior contributor to CNBC talking to us about tax reform and I know. You know leave. From out personal perspective when you talk to your buddies and he talked to guys that are. Doctors lawyers. Salesman accountants. Truck drivers anybody who's an employee is sane and pay. I understand why you need corporate tax reform but I want some too. And I fully understand that and I hate to be the bearer of bad news but I think the corporate side is what's gonna get done and I I don't know. I know that the personal size of the and he can see tangible in Everett paycheck because it makes you feel it you go home and you say hey honey with an extra. Forty bucks an hour paycheck president a thousand bucks in the paycheck it's that you know thousand fifties and OK you know now we can go out and you know send our you know daughter or your tennis. Some industry and not only that you got a raise so you know year and you get some overtime and and you know this week we need coupled rate. Raises an overtime workers or make it about an extra four and a half percent yup you know adding a tax cut did part of you feel pretty good.
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