Larry Kudlow: Biden brags about his economic policies, yet he hasn't done anything to reduce spending

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It’s always an intellectually sizzling moment when Joe Biden goes out there and starts speaking about the economy and his economic policies. Today he spoke at a Martin Luther King event sponsored by that well-known even-handed centrist, the Reverend Al Sharpton.

Of course, virtually everyone cherishes Martin Luther King’s phrase “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.” It’s just one of the great phrases in the English language. 

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But Joe Biden didn’t really bother with that unifying theme at this speech. Instead, he just called Republicans “fiscally demented.” How’s that for a unifying theme to welcome a new GOP Congress? Not very good.

Of course, Mr. Biden always brags that the deficit came down $350 billion in 2021 and another trillion in 2022, but he neglects to mention that almost every nickel of that came from ending various COVID emergency spending programs. Not ending all of them, because he’s still giving away student loan cancellations, left and right, which is going to cost about $600 billion over the next 10 years according to several estimates, but he forgot to mention any of that.

BUDGET CAP BATTLE BREWING BETWEEN GOP, DEMS AS DEBT LIMIT LOOMS

He also forgot to mention that his spending agenda in the past two years has come to roughly $6 trillion. So much for fiscal dementia.

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Now, unfortunately some Senate Republicans helped Biden by actually voting for $3 trillion of that incredible spending spree. Including the recent omnibus bill, but then Biden got roughly $3 trillion in spending on his very own, without anybody’s help. The point is, Biden hasn’t done anything to reduce spending or cap spending or restrain spending, not one droplet of fiscal restraint on his part. Hopefully the era of Republican Senate compliance with Biden’s big government socialism has come to an end with the new GOP house, hopefully.

As usual, Mr. Biden tries to take credit for creating new jobs — except the problem here is he hasn’t really created any new jobs. Jobs lost during the COVID pandemic have returned. Now, that’s a good thing, but it’s way below the trend line, which would’ve probably added 5 to 7 million actual new jobs from the pre-COVID Trump baseline trend.

Biden is proudly bragging about his 15% minimum corporate tax, which will damage growth and is a phony concept to begin with, since companies are using legal tax credits, or expensing provisions that were legislated into law by Congress. 

Now, Biden also mocks the Republican House IRS vote to stop another $80 billion for 87,000 IRS agents. Now, that’s a bill that Biden says would help the wealthiest, but actually, scoring by the Congressional Budget Office and the Joint Tax Committee strongly suggest that its middle and lower-income people that will pay the bulk of these new IRS audits, beginning, by the way, with a $600 audit, which is surely a middle-class issue. Is it not?

Then Biden rails on about trickle-down economics as he always does and he blames what he calls the $2 trillion Trump tax cut for helping rich people. Alright, actually, study after study, left of center and right of center, have shown the biggest winners from the Trump tax cuts were middle- and lower-income people, minority groups, a falling poverty rate and the most recent CBO numbers on taxes, well they show that what was supposed to be a $1.5 trillion revenue loss from the Trump tax cuts actually turns out to be an almost $1.5 trillion revenue increase — get this — roughly 40% in only 5 years.



Joe Biden: AP newsroom AP newsroom


© AP newsroom
Joe Biden: AP newsroom AP newsroom

Instead of dropping, revenues went up. The Laffer Curve worked again. So, perhaps Joe Biden has a bit of fiscal dementia himself.

Meanwhile, Kevin McCarthy made it absolutely clear over the weekend that the GOP wants new spending caps and budget cuts in their debt negotiations. Our friend Kevin Hassett has a great idea — McCarthy should offer Democrats a deal: $3 in spending cuts for every $1 added to the debt ceiling. Three for one. Now that is what I call fiscal intelligence. 

This article is adapted from Larry Kudlow’s opening commentary on the January 16, 2023, edition of “Kudlow.” 

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