LARRY KUDLOW: We need economic prosperity stewardship

Today’s inflation report was the worst in 6 months and even last month’s was revised higher. There’s no question that the Joe Biden economic malaise continues, but there is a big question: where’s the Republican presidential campaign growth and prosperity solution plan?   

Where is it? So far, I haven’t heard any of the leading candidates on this topic. I mean the Wanna-Be’s and we call know who they are. Bidenomics has failed, so how will the GOP turn failure into success? That’s what I want to know. We are going to talk to the great Kellyanne Conway about this vexing problem in just a few moments.  

Now, briefly let’s review the Biden malaise.  Today’s shocking inflation jump is just one example.  Actually, all the inflation reports in January were shockingly bad. Energy is up almost 10%. Food up over 11%. All of that is year-on-year. Producer prices up 6%, consumer prices up 6.4%. The Atlanta Fed’s wage tracker up 6.1%.   

Retail sales looked strong in January – but, adjusted for inflation, they were actually flat from a year ago. Manufacturing actually flat over the past year.  The latest CBO budget report was shockingly bad. 

NEW HOME SALES JUMP MORE THAN EXPECTED IN JANUARY TO 10-MONTH HIGH 

Deficits expected to double from $1.4 trillion today to nearly $3 trillion over the 10-year window. Total deficits will come to $20.3 trillion, or 7.3% of GDP.   

 Outside of wartime or a national emergency, these are shocking numbers never seen before. In fact, the CBO estimates $3.3 trillion more in debt than it did just last May and their estimate is 118% of GDP.   

The Biden administration continues to pound away in its war against fossil fuels, which of course is funding the war on Ukraine for Vladimir Putin, who enjoys selling his 10 million barrels a day into a high-price oil market caused by Biden’s clamps on production and let’s not forget the Biden war against business, with about $150 billion in tax hikes and almost countless new regulations.   

Almost lost in the economic shuffle this week, real GDP in last year’s fourth quarter was revised lower and for the year grew by 0.9% with a 6.5% inflation rate.  Two years ago, Biden inherited a Trump economy growing 6.5% with a 1.4% inflation rate.   

 So, the case against Bidenomics is very strong.  American blue-collar workers, the great middle class, are losing ground on a daily basis. They have jobs, in some cases two or three jobs, but their wages are falling behind inflation. Their take-home pay is shrinking.  

That’s the Biden solution? More generous welfare benefits that essentially pay people not to work.  Work requirements are a thing of the past. The dignity of work has suffered and, with that, the happiness quotient associated with a job well done has evaporated.  

So, you might say the sick Biden economy opens the door for huge Republican opportunities in the 2024 election. You might say that. I might say that.  The trouble is, none of the leading Republicans are saying that and that’s a sad tale that I need to report.   

What are we hearing from the GOP field on the way to their first debate in Milwaukee come this August? Age, gender, mental testing, sometimes Ukraine, sometimes the border, affirmative action, ESG, sniping at each other.  I don’t hear a thing about economic growth and prosperity.   

I don’t hear a thing about a simple formula that includes lower spending, tax cuts, deregulation, and a strong dollar.  How about this? Tax cuts and sound money will cure Biden inflation and recession.   

That’s what JFK did. That’s what Reagan did and in his first term, that’s what Donald Trump did pre-COVID.  I worry about debt like everybody else, but, let me tell you, if the economy grew at 3.5% to 4% for the next 10 years, debt would dissolve.   

Social security would remain solvent. Excessive spending would be unnecessary. That’s right: tax cuts, sound money and throw in some work requirements as well.  Then you’d have more people working at good wages, paying even more in tax revenues at lower tax rates and then open up the fossil fuel spigots and you’d have yourself a plan.   

It would be a supply-side economic growth and prosperity plan. Think back, way back, to Donald Trump’s brilliant New York Economic Club speech in September 2016. It was a pathbreaker. It was pro-growth. It was aimed at the middle class, who received 70% of the benefits of his tax cuts. This is the kind of platform the GOP has to build.   

They occasionally make criticisms about the economy, although frankly I’m not hearing it from the leading candidates very much. In fact, I’m not hearing any of them talking about the economy whatsoever, including my former boss, but even when they do criticize Bidenomics, there’s no GOP alternative, there is no common-sense constructive way out of the Biden economic mess.   

Let me repeat: growth and prosperity is the single biggest issue out there and will remain so.  Can I be clear on this? There are a lot of issues, there always are, but the lack of growth and prosperity dwarfs them all. I’m blowing the whistle on all of them. This here is tough love. My former boss, all of them, where are you on the economy? Save America. We need economic prosperity stewardship and we need it right away.