Why Do Economists Keep Looking at Just One Side of the Ledger?
By Larry Kudlow – April 11, 2025
To all my economist friends and financial reporters out there why are you still stuck on this one-sided way of looking at the economy?
You’re constantly predicting sky-high inflation or an inevitable recession, but honestly, you’re missing the bigger picture especially the one shaped by President Trump’s latest economic playbook.
Take those big, headline-grabbing tariffs he mentioned on “Liberation Day” last week. Everyone freaked out, but let’s be real: they’re probably not even happening the way they were first pitched.
For one, the numbers used to justify the tariffs were a mess full of confusing math around trade deficits and surpluses. And more importantly, Trump’s pulling out his old “Art of the Deal” strategy again, so things could change quickly depending on how negotiations play out over the next 6 to 12 months.
Sure, that original $700 billion tariff threat would’ve been a big hit roughly 2% of the U.S. economy. That’s recession territory. But what’s more likely is a 10% baseline tariff, which would total around $300 billion only about 1% of GDP. That’s way more manageable.
Now let’s flip the ledger. Trump’s tax cuts are expected to total around $5 trillion. Compare that to the $300 billion in Tariffs no contest. That’s a massive economic boost.
And let’s not forget: Elon Musk has reportedly found $150 billion in budget savings already, getting closer to the $1 trillion target. Add that to Trump’s goal of wiping out nearly $2 trillion in Biden-era regulations, and you’ve got serious economic fuel.
Plus, inflation might not be the monster people are making it out to be. The latest consumer price index actually dipped slightly. Gas prices in March fell 6%, and with oil dropping from $70 to $60 a barrel recently, we’re likely to see even cheaper prices at the pump soon.
Trump calls this his “liquid gold” move cheaper oil means lower costs across the board.
Even those wholesale tariffs won’t hit consumers as hard as people think. By the time they show up in retail prices, they’re usually trimmed down by 25–50%.
So once again, to all the economists out there stop looking at just one side of the books. There’s a lot more going on than your doom-and-gloom models are picking up.
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