White House defends ‘elementary double count’ error in the budget

Omkar Godbole FXStreet Contributor

Lawrence "Larry" Summers (a former economic adviser to former president Barack Obama, and Treasury secretary in Bill Clinton's administration) pointed to an ‘elementary double count’ error which no serious business person would make.

The White House proposed revenue neutral tax cuts with neutrality coming in part because the tax cuts would help fuel higher growth and pay for themselves by generating an additional $US2 trillion in revenue over 10 years.

Summers says the Trump administration was double-counting that money. One cannot use growth benefits of tax cuts once to justify an optimistic baseline and then again to claim that tax cuts do not cost revenue.

"This is a mistake no serious business person would make. It appears to be the most egregious accounting error in a presidential budget in the nearly 40 years I have been tracking them”, Summers said.

Mick Mulvaney, President Trump's budget office director, said, "We stand by the numbers”.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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