Larry Kudlow may not be the best person to serve as President Donald Trump's top economic advisor, said David Stockman, former director at the Office of Management and Budget under President Ronald Reagan.

"He's going to help Trump sleepwalk right into a tremendous fiscal collision," Stockman said on "Closing Bell."

Stockman, who was Kudlow's boss when he worked in the Reagan White House, congratulated Kudlow on CNBC on Wednesday, following the news that the president offered Kudlow the job of National Economic Council director. Kudlow, senior CNBC contributor and former Wall Street economist, will be replacing Gary Cohn, who resigned last week.

"But unfortunately that's about as far as it goes," Stockman said of his good wishes for Kudlow. "He's walking into what I think is an impossible mission."

Wall Street should be preparing for a "roaring deficit," Stockman said, predicting it will "hit full steam" this fall. But instead he fears Kudlow will "tell Trump what he wants to hear."

"That is, he will find ways to convince Trump that if he just waits a little longer, growth is around the corner," Stockman said. "That's not going to happen."

Stockman said there will be a yield crunch in the coming year that Washington is ill prepared for.

Kudlow conceded there will be a deficit in the short run, but he compared it to a company making new investments to grow its business.

"If you are borrowing to have greater investment — literally we are investing in America with these lower tax rates and sound money and making sure we look after our interests overseas — that's the best possible thing," he said in an interview Wednesday on "Closing Bell."

Cohn resigned last week after disagreements with the president over tariffs. Kudlow is a proponent of free trade and generally does not advocate for tariffs. Some think with Kudlow in the White House, the president might back down on his stance on trade and tariffs.

"If there's an expectation that this is going to change anything on the matter of trade at the moment, I think that is illusory," Stockman said. "That's a delusion."

"[Trump has] never changed his mind — and he's not going to listen to anyone on these issues, including Larry," Stockman said, describing the president as a "rabid protectionist" dating back to the 1970s.

"Heads, Trump wins; tails, Larry loses," he said.

Kudlow said Stockman is "entitled" to his opinions of Trump but pointed out that Stockman and the president have never met.

"For 35 some-odd years my friend Dave Stockman has been a sky-is-falling guy," Kudlow said.

On Tuesday, Trump went on record saying he doesn't agree with Kudlow on everything but welcomes healthy debates.

"I want to have different opinions," Trump said. "We agree on most. He now has come around to believing in tariffs as a negotiating point."