LARRY KUDLOW: Biden's State of the Union had 'a whole bunch of whoppers and tall tales and fabrications'
One of the many troubles in the Biden economy is the affordability crisis, Kudlow says
Larry Kudlow: Trump handed Biden an economic silver platter
FOX Business host Larry Kudlow reacts to the president's State of the Union address on 'Kudlow.'
In last night's State of the Union speech, President Joe Biden had a whole bunch of whoppers and tall tales and fabrications that never seem to coincide with factual reality.
The Committee to Unleash Prosperity's hotline reports on the budget deficit, a familiar Biden untruth when he says he reduced the deficit by $1.7 trillion – a number he's carried on with for years and the Washington Post gave him a Bottomless Pinocchio for.
The reality is Mr. Biden generated about $6 trillion of red ink during his term and the latest CBO baseline shows that federal debt in public hands is projected to rise to $48 trillion, or 116% of GDP – both unheard of numbers.
The House Budget Committee estimates that Biden's most recent budget includes $82 trillion in spending over 10 years, eclipsing 24.8% of GDP, which is $21 trillion higher than the pre-Biden CBO projections, and is 21.1% more spending than the historical average of the past half-century.
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Then, of course, Mr. Biden gives the usual left-wing "we will make the rich pay their fair share" pap, which is always an amusing charge, given the fact that the top 1% of earners pay nearly half of the federal income tax – 46% to be precise – even though they earn only 26% of the income.
By the way, study after study shows that lower tax rates reduce tax sheltering and produce more tax revenues. Biden, of course, with the usual far-left Democratic class warfare, promises to grow the economy with a "soak the rich" tax plan that will raise the corporate tax, nearly double the capital gains tax, quadruple the stock buyback tax, and impose a new 25% wealth tax on unrealized capital gains on billionaires, but Biden defines "billionaires" as anyone with more than $100 million, showing once again that he can't count.
Then, of course, he keeps telling us that he inherited a terrible economy from Donald Trump. The only problem with that assertion is that in the third quarter of 2020, Trump's COVID V-shaped recovery produced a 33% growth rate, 4.1% GDP growth in the fourth quarter of 2020 and 6.5% in the first quarter of 2021, and – get this – with an inflation rate of 1.4%.
This was not an economy on the brink of disaster, this was an economic silver platter than Trump handed to Biden, who then proceeded to slam it into the ground with a peak 9% inflation rate and two negative GDP quarters in the first half of 2022. Go figure.
One of the many troubles in the Biden economy is the affordability crisis, where typical working families have lost money in the last three years because of the high prices of essential goods and services and lackluster income.
During the Trump years, working folks got a 9% pay increase adjusted for inflation. During the Biden years, they lost nearly 5%. The average oil price under Trump was $53 a barrel. Under Biden it's been $80 a barrel. The average inflation rate under Biden has been 6% at an annual rate for 3 years. Under Trump, it was 1.9% for his whole four-year term.
Adjusted for the pandemic, Trump created 6.4 million new jobs. Biden -- only 5.5 million and, of course, last night, Mr. Biden continued his free-spending ways, but adding a new wrinkle.
He's going to try to push out a $400 mortgage credit to deal with the mortgage home-ownership affordability crisis, where mortgage rates were 2.5% under Trump and are now over 7% under President Biden and, of course, Mr. Biden wants to forgive student loans even though the Supremes have ruled it unconstitutional.
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Plus, he wants to increase a refundable earned income tax credit, and a refundable child tax credit and a permanent expansion of supersized Obamacare subsidies and the Biden climate war against fossil fuels continues, while he does nothing to solve the open-border war with illegal immigrants and the illegal immigrant-related crime wave.
Yes, Mr. Biden was still standing at the end of his speech, but, no, he's not doing a thing to make America great again.
This article is adapted from Larry Kudlow’s opening commentary on the March 8 2024, edition of "Kudlow."
