White House economic adviser Larry Kudlow became one of the first public officials to suggest that the United States might not get another stimulus check on Friday. In an interview with Bloomberg TV, Kudlow said “we can live without” the hotly contested financial relief. Many viewers and social media users disagreed.
Kudlow discussed the state of the economy on Friday, focusing mainly on the tense negotiations between the Republican-controlled Senate and the Democrat-controlled House of Representatives. The two sides have been trying to agree on a second stimulus package since May, but have still not reached a deal. When asked what would happen if the two sides could not come to terms by the end of the year, Kudlow said: “look, we can live without it. We can absolutely live without it.”
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“Do we absolutely need it? No. I’m not going to precondition anything here,” Kudlow said. “Right now the economy is on a self-sustaining recovery path in my judgment and will continue along those lines, and will continue to surprise on the upside.”
Kudlow said that a “smart, well-targeted” stimulus package “would be helpful,” but maintained that it is not necessary. To him, the ideal package would include employment assistance, the extension of small business loans and funding for schools to reopen.
Kudlow’s confidence was reportedly based on the falling unemployment rate for the U.S. as a whole. According to a report by Reuters, the country’s unemployment rate was 8.4 percent on Friday, with approximately 1.37 million jobs opening up in August. Still, the potential for future waves of infections has kept most experts from getting too hopeful in recent months.
As for the stimulus package itself, Kudlow said that the gap between the two sides in this negotiation remains “wide.” Republicans and Democrats are barely inching closer on the overall budget of the stimulus package itself, with the White House now agreeing to $1.3 trillion in aid and the House dropping down to $2.2 trillion. However, House Speaker Nancy Pelosi has said that she is not budging any further on the bill, as Republicans continue to raise concerns about the national debt.
Despite Kudlow’s confidence, other economists are nervous that the U.S. economy could face serious fallout without more aid soon. Last month, former president of the Atlanta Federal Reserve, Dennis Lockhart, told CNBC a “double-dip” in unemployment could be possible.
“If things go badly with the management of the virus and there’s more cascading — which (Thursday’s) numbers of initial claims might suggest — then yes, it’s possible we have a double-dip. I don’t think that’s probably the base case, but I think it’s still possible,” he said.
