Larry Kudlow, White House Economic Adviser, predicts a very strong American recovery is underway – but that a Biden presidency could be absolutely devastating to the country’s economy.
Kudlow points out the strong economy that President Trump’s deregulation and tax cuts delivered pre-pandemic and suggests that the country is now seeing a powerful “V-shaped recovery” with Trump at the reigns.
“This will be a self-sustaining economic recovery with very big numbers in Q3 and Q4,” he said.
Kudlow feels that Biden’s obvious plans to stick Americans with a higher tax bill will hinder the country’s recovery efforts in a post-coronavirus era.
During a Fox News interview with host Neil Cavuto, Kudlow was asked what he thinks about Biden’s “pledge to make the economy more fair as president.”
“What I make of that is higher taxes,” Kudlow answered. “It’s very clear the other team is going to raise taxes. It’s in their policy book. We’re looking at at least a $3 trillion tax increase.”
Kudlow continued, “You know, I would just say, Neil, I’m not the political guy, I’m the policy guy. If you’re in or coming out of a pandemic contraction such as we have experienced — brutal, difficult, heart-breaking stuff — you don’t want to be raising taxes.”
“The issue here is the significant left turn in Democratic policies,” Kudlow added. “President Trump’s tax cuts and deregulation and fair trade and energy revival gave us a splendid, fast-growing economy for three years and two months before the pandemic. Why do you want to unwind that?”
Both Biden and Harris have pledged to repeal President Trump’s corporate tax cuts and proposed the type of programs will unquestionably lead to higher taxes.
“I mean, it’s like, ‘Where are the Keynesians now that we need them?’ A self-respecting Keynesian would say spend more and tax less. And that team — [the] Biden team — is talking about, yeah they are going to spend a lot more but they’re also going to tax a lot,” Kudlow said.
“They’re going to raise corporate tax, they’re going to raise the individual tax. They’re going to raise the capital gains tax to 50%? What a deterrent to investment and productivity and real wages.”
Kudlow’s warning about the potential Biden harm comes as the U.S. pulls off a stunning beat of unemployment expectations – with weekly unemployment claims falling under 1 million for the first time since lockdowns were put in place in mid-March.
During the week ending on Aug. 8, roughly 963,000 workers filed unemployment claims, according to data released by the Department of Labor on Thursday. The number came in lower than expected as economists had predicted that claims numbers would remain at about the 1 million mark.
The better than expected unemployment report is another sign that the U.S. economy may be on the path to recovery despite fears of a second wave of the disease and some states re-imposing strict lockdown orders to slow the spread of the coronavirus. The unemployment rate peaked at 15% in April but fell to 10.2% in July.