Top Reagan economic adviser Art Laffer stated on Friday that the current boom the U.S. economy is experiencing could last for up to a decade.
On Fox News, Laffer was asked to respond to Trump National Economic Council director Larry Kudlow’s assertion that the 4.1 percent Gross Domestic Product growth rate achieved during the second quarter is sustainable.
“It is surely possible,” he answered. “My view is it’s really possible for the next eight or ten years, it’s possible to get this type of growth to bring us back to the standard of living we were living at when Clinton left office and we had the disaster of (George W. Bush) and (Barack) Obama.”
Laffer added, “Whether it will happen or not as Larry said, it’s all policies oriented. Policies really matter. Tax cuts, sound money, free trade, minimum regulations and spending restraint, all of that matters and this administration can do it and really set us off on the launch pad.”
In his 2009 book, “The End of Prosperity: How High Taxes Will Doom the Economy — If We Let It Happen,” Laffer, along with co-authors Stephen Moore and Peter Tanous, argued that the tax and deregulation policies enacted under Ronald Reagan beginning in the early 1980s unleashed a 25-year economic boom.
Kudlow — who served as an economist in the Reagan administration — wrote the forward to the book.
At a cabinet meeting on Thursday, Kudlow said that America’s current economic boom launched under Trump is the most important and underreported story of the year.
“By far the single biggest event, political or otherwise, this year is an economic boom that most people thought would be impossible to generate. Not a rise, not a blip — a genuine economic boom,” he said.
“Confidence is everything,” Kudlow added. “The new numbers coming in — retail sales, industrial production, low inflation, a rock-steady dollar. Trillions of dollars of capital from all over the world is coming into the United States because our economy, our investors, our workforce are crushing it right now. We are crushing it.”
The economist contended the boom is having a positive effect on American workers’ take-home pay across the board.
“So that measure is growing at 3.1 percent the last 12 months,” Kudlow stated. “When we came to office, it was less than 1 percent on a 12-month basis.”
He emphasized, “Everyone’s wages and salaries, adjusted for taxes and adjusted for inflation, is growing at 3 percent. It’s a tremendous number. And there’s no signs that’s abating.”
“It’s like, if you give Americans some freedom to run, they will run.”
Kudlow believes the current growth is not a “one-quarter blip,” citing rising productivity and business investment and low inventories.
“And presidential policy — low tax rates, roll back regulations, open up energy, trade reforms to help the American workforce and the employers — across the board, we’re not punishing success; we’re rewarding success,” he said. “We’re not against businesses; we are for businesses. And we have a President who, in my words, was telling folks to take a rip at the ball, and they’re doing it.”
In Kudlow’s assessment, “We’re in the early innings.”
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