In a segment dubbed “Big Think,” Larry Kudlow laid out a stark contrast between two economic futures for America. Using CBO projections of 1.8% growth, the national debt balloons to a catastrophic 180% of GDP over the next few decades. But if you plug in 3.5% real growth — a rate Trump is already exceeding at a 4%+ clip — the debt essentially drops to zero over the same timeline. Kudlow challenged his guests to explain why the official scorekeepers refuse to use more realistic growth assumptions.
Liz Peek jumped in with sharp criticism of the CBO, pointing out that they have been “consistently wrong” and “consistently underestimating American growth.” She argued the CBO is completely ignoring the AI revolution, the surge in productivity, and the spike in business investment — all of which are already driving the economy well beyond their lowball 1.8% projection. Peek said she was struck by the data from Steve Moore’s newsletter, calling the difference between the two growth scenarios a “huge” revelation that changes the entire debt conversation.
Former Deputy Treasury Secretary Michael Faulkner reinforced the point by noting that during Trump’s first three years, growth averaged close to 3% thanks to pro-growth policies — and the second administration is running the same playbook. He introduced the concept of a “virtuous cycle,” arguing that higher growth reduces the deficit, which brings down long-term interest rates, which in turn solves the affordability crisis in housing and education, which then fuels even more growth. Faulkner stressed that getting this cycle going again should be the central focus of economic policy.
Kudlow wrapped up by expressing frustration that the CBO and Federal Reserve — which projects just 1.7% growth — never even present faster growth as an option in their forecasts. He argued that for a hundred years, America grew at 3.5% annually without inflation, and that growth has always been the answer to the country’s biggest fiscal challenges. His bottom line was simple and one he’s been making for decades: growth solves problems, and Washington refuses to admit it.
