Experts And Critics Tear Apart Trump’s Recycled Tax And Economic Policy Reforms

››› ››› CRAIG HARRINGTON & ALEX MORASH

Republican presidential nominee Donald Trump once again updated his tax and economic policy proposals during a September 15 speech at the Economic Club of New York. Journalists and experts immediately slammed Trump’s plan as “a total fantasy,” “pretty much impossible,” and “pie in the sky.”

Trump Rehashes Standard GOP Policies To Boost Economy: Tax Cuts, Reduced Regulations

WSJ: Trump Provides “Details For His Economic Blueprints…. Designed To Shore Up Support” From GOP. Wall Street Journal reporters Nick Timiraos and Richard Rubin outlined some of the new “details” Trump discussed on economic and tax policy during his September 15 speech at the Economic Club of New York, including his commitment to “shrink nondefense spending” (aside from some “entitlement programs”), his proposal to reduce federal government spending by 1 percent annually, and his proposal to cap some deductions available to some high-income Americans. The article described Trump’s plan as being “designed to shore up support from some Republicans that have harbored doubts over his conservative bona fides.” [The Wall Street Journal, 9/15/16]

Trump’s “Pro-Growth" Economic Policy Will Not Actually Boost Job Creation. According to a tax reform outline and speech transcript published online by the Trump campaign, the Republican nominee is promising to create “a total of 25 million new jobs” over the next decade while increasing economic growth to 3.5 percent per year on average by reducing regulations, marginal income tax rates, and government spending. But Trump’s proposal to create 25 million jobs and renewed economic growth is actually a continuation of current trends. From 2012 through 2015, the Obama administration oversaw job creation of roughly 2.5 million annually, according to the Bureau of Labor Statistics (BLS), despite economic conditions that Trump attacked throughout his speech and domestic tax and regulatory policies that Trump promised to slash and gut. [Bureau of Labor Statistics, accessed 9/15/16; DonaldJTrump.com, 9/15/16, 9/15/16]

Journalists And Experts Slam Trump’s “Impossible” Economic Promises As “Not Even Remotely True”

Economists Predict Trump’s Economic Plan Would Start A Trade War, Shrink Potential Size Of The Economy. According to CNBC, economists Jamie Thompson and Sarah Maxwell of Oxford Economics argued in a September 14 report that if the GOP nominee “were able to implement all of his proposed policies,” the resulting downturn would shave $1 trillion off “the forecast size of the U.S. economy” in just five years. The economists noted that Trump’s proposal to deport millions of immigrants would be a “drag on U.S. labor supply” and that his “harsh government spending cuts” may lead to an economic contraction. The report built on an earlier study from Oxford Economics economist Kathy Bostjancic that indicated Trump’s trade policy could initiate a trade war with China, Mexico, and other nations, which “‘would lower both the level of real GDP by 1.6 percent and employment by 1.4 million by 2020,’” Politico reported. [CNBC, 9/14/16; Politico, 5/12/16]

Economist Marc Goldwein: Trump’s “Pie In The Sky” Promises On Economic Growth Will Be “Pretty Much Impossible” To Fulfill. On the September 15 edition of MSNBC’s The Place for Politics, economist Marc Goldwein of the Center for a Responsible Federal Budget (CRFB) criticized Trump’s reliance on so-called “dynamic scoring” to boost economic growth estimates spurred by proposed tax cuts and regulatory changes:

ANDREA MITCHELL (HOST): Donald Trump has proposed a $4.4 trillion tax cut, and he has said that it is only going to cost the federal budget $2.6 [trillion] because of what is called “dynamic scoring.”

[...]

MARC GOLDWEIN: What Donald Trump is saying is that his tax is basically that his tax reform can grow the economy enough to offset about half of the costs. Now, unfortunately, I don’t think that’s particularly realistic. Certainly, tax reform can help to spur economic growth, but we’ve never really seen a tax reform that would pay for half of its costs or anything like that.

[...]

I think a lot of this is just pie in the sky. Of course, we can grow the economy with better tax policy, better regulatory policy, and better energy policy. But we’re talking about a couple of percentage points per year -- I’m sorry, a couple of decimal points per year, not a couple of percentage points per year. We just can’t get this kind of economic growth. We haven’t ever, really, historically. With an aging population, it’s going to be pretty much impossible to, going forward. [MSNBC, The Place for Politics, 9/15/16]

Economist Austan Goolsbee: Trump Has Not “Check[ed] The Details Of His Own Plan” Because His Claim Of Middle Class Relief Is “Not Even Remotely True.” In response to Trump’s speech, a harshly critical CNN panel including analysts Christine Romans, David Chalian, and Rana Foroohar as well as University of Chicago economist Austan Goolsbee slammed Trump over reliance on the “faulty” premise that tax cuts “would somehow unleash the animal spirits in the economy.” Foroohar correctly noted that tax cuts implemented by presidents Bush and Obama failed to “jump-start growth” while Romans add that Trump’s proposed annual economic growth target of 4 percent is “very optimistic” and has not been realized since the Clinton administration. Goolsbee concluded the segment by noting that Trump’s tax cut proposal is still overwhelmingly favorable to the richest Americans and “needs to be fact-checked”:

AUSTAN GOOLSBEE: Of course they are. He’s not including the massive tax cuts for businesses. He's not including that he wants to repeal the estate tax that would benefit his own family by some $3 or $4 billion. So, you're being generous to say that [his speech] needs to be fact-checked. My Trump policy rule is we should spend less time analyzing Trump's ideas than he spent thinking the ideas up. We've already violated my Trump rule by the end of this segment. I do not believe that he's even checked the details of his own plan. Because you heard him saying that the benefits of the tax cut would be concentrated in the middle class, and that’s not even remotely true. [CNN, Legal View, 9/15/16]

Economists Mark Zandi And Douglas Holtz-Eakin Conclude Trump’s Job And Growth Targets Are “Not Feasible” After Accounting For “The Negatives” Of His Other Policies. Economists Douglas Holtz-Eakin and Mark Zandi thoroughly deconstructed Trump’s economic policy outline during the September 15 edition of CNN’s The Lead, with Zandi noting that job creation and economic growth on par with Trump’s promises is “not feasible” without a significant increase of net immigration over the next decade, which Trump vehemently opposes. Holtz-Eakin, a conservative economist and long-time opponent of the Obama administration, also assailed Trump’s promises of robust economic growth through tax cuts, regulatory reductions, and a focus on energy production:

MARK ZANDI: No, it's not feasible. The reason is -- the only way you would get there is if you significantly increased immigration. In fact, you would have to more than double current legal immigration into the country to have enough people here to actually create that many jobs. The simple reason is that the Baby Boom generation -- that's the big Baby Boom generation that people in their 50s and early 60s -- they're retiring, and they're going to retire en masse over the next ten years. And so the labor force -- if we don't change immigration law, if we don’t allow more immigrants in the country, the growth in the labor force -- and the labor force is the people who are willing and able to work -- is going to grow very, very slowly so that it's mathematically impossible to create that many jobs.

[...]

DOUGLAS HOLTZ-EAKIN: They're not likely. Mark’s on to the right arithmetic. GDP output, the economy, however you want to label it, grows because we have workers and you can have growth in the number of workers -- that’s going to be slow -- or output per worker productivity. So he needs a productivity boom of unprecedented proportions to get to those kinds of numbers. And the places he’s pointing to -- energy, I don't think so. I am a big critic of the Obama administration's regulatory burden, but getting rid of that isn't going to deliver a percentage point of growth. So it's hard to make this all add up, especially when you add in the negatives. The immigration is a negative, the trade is a negative. So, he's going to try to make it all add up and grow more rapidly -- I give him points for that -- but the numbers aren't there. [CNN, The Lead with Jake Tapper, 9/15/16]

CNN’s Rana Foroohar: “To Be Honest, A Lot Of This Is Magical Thinking.” On the September 16 edition of CNN’s Newsroom LA, CNN global economic analyst Rana Foroohar derided Trump’s reliance on tax cuts to boost economic growth as “magical thinking” and noted that economists now have “20 years of evidence that this sort of trickle-down theory is not working.” When asked by co-host John Vause if there is “any explanation how” Trump’s policies could boost economic growth above 4 percent annually, Foroohar responded that “a lot of economists” are worried that Trump’s economic agenda and immigration crackdown are “going to shave growth” below its current trajectory. [CNN, Newsroom LA, 9/16/16]

Bloomberg’s Megan Murphy: Trump’s Job Creation, Economic Growth Targets Far Beyond “What Economists Think Is Achievable.” On the September 16 edition of Bloomberg’s <Go>, host David Westin and Washington bureau chief Megan Murphy discussed the merits of Trump’s “classic trickle-down argument” for job growth driven by tax cuts, with Westin wondering “who’s going to fill those jobs” if Trump is “shipping all the immigrants back.”

DAVID WESTIN (HOST): One of the things that struck me was his plan on jobs. He’s very aggressive on jobs -- he says he’s going to created 25 million new jobs over 10 years. But as I looked at the numbers, there’s only 7.8 million people who are unemployed. So, who is going to fill those jobs, particularly if he’s shipping all of the immigrants back?

MEGAN MURPHY: Yeah, this is something that’s caused -- we have a great piece yesterday looking at house builders and how they are saying, “Look if you put this wall to Mexico, we actually need this labor to come in to help us deal with the demand for housing, and have these workers come in.” There is no question that his job growth plan is by any stretch of the matter -- and his overall economic growth plan -- is out of kilter of what economists think is achievable. He says, “Look under my plan, I will have businesses relocated, I’ll have factories come back, I’ll have business come back, and those jobs will grow naturally.” No economist has been able to match that up with the numbers. [Bloomberg, <Go>, 9/16/16]

CNN’s Christine Romans: “Plenty Of Skepticism” Surrounds Trump’s Claims For Economic Growth. On the September 16 edition of CNN’s Early Start, co-host Christine Romans fact-checked Trump’s economic goals, pointing out that the last time the economy grew at 4 percent was in the year 2000, and it was largely due to rapid technological advances and the internet. Romans reported that experts have expressed “plenty of skepticism” about Trump’s plan of creating 25 million new jobs over the next 10 years without “increas[ing] immigration dramatically,” which would be contrary to Trump’s immigration plan. [CNN, Early Start, 9/16/16]

CNN’s Romans And Foroohar: Trump “Wants To Do What Bill Clinton Did” On Jobs, But “The Math Really Doesn’t Add Up.” On the September 16 edition of CNN’s New Day, Romans and Foroohar discussed Trump’s economic plan in more detail, with Romans noting that Trump will struggle “to do what Bill Clinton did” in terms of job creation because “so many of his other policies are so disruptive.” Foroohar added that “the math really doesn’t add up” for Trump’s so-called “dynamic growth plan,” which assumes that tax cuts will boost economic growth even though “there’s not a lot of evidence” that the policy works:

[CNN, New Day, 9/16/16]

Business Insider’s Josh Barro: Trump Plan “Not *That* Different From Jeb.” Business Insider senior editor Josh Barro compared Trump’s economic plan to failed Republican candidate Jeb Bush’s economic plan, saying both “promise huge tax cuts, say the math will add up due to rapid growth.” Barro reported that the slowing population growth of working-age Americans is responsible for much of the recent decline in growth and an “anti-immigration policy would exacerbate that.” Barro also noted that under Trump’s latest plan wealthy earners would receive a large tax cut:

[Twitter, 9/15/16, 9/15/16, 9/15/16]

Time Magazine’s Zeke Miller: Trump Plan Ignores His New Spending Proposals; There’s “No Clarity From Trump How He’ll Pay For All Of This.” Time political reporter Zeke Miller blasted Trump for providing “no clarity” for how his plan would be paid for, adding that it “doesn't seem to take into account his other domestic spending plans”:

[Twitter, 9/15/16, 9/15/16]

NY Times’ Neil Irwin: It’s “Remarkable” Trump Would Claim The U.S. Is Not Wealthy “While In Midtown Manhattan Surrounded By Wealthy Financiers.” New York Times correspondent Neil Irwin referenced Politico’s Ben White -- who debunked Trump’s claim that America is poor by noting that “it is the wealthiest country on earth” -- in noting how “remarkable” it was to make that statement “in midtown Manhattan surrounded by wealthy financiers.” Irwin also mocked Trump’s “word salad” proposal.:

[Twitter, 9/15/16, 9/15/16]

WSJ’s Richard Rubin: Trump Claims He Won’t Cut Taxes For The Wealthy, “Then Touts 15% Business Tax Rate, Which Cuts [Wealthy] People's Taxes.” Wall Street Journal reporter Richard Rubin hit Trump for claiming he would not cut taxes for those earning $5 million per year while proceeding to slash the business tax rate, which mainly affects the same top earners:

[Twitter, 9/15/16]

RealClearPolitics’ Rebecca Berg: Trump Lowered His Growth Predictions From 6 Percent To 3.5 Percent. After Trump promised 3.5 to 4 percent economic growth in his speech, RealClearPolitics reporter Rebecca Berg pointed out that he used to claim his plans would create 6 percent growth:

[Twitter, 9/15/16]

Wash. Post’s Josh Rogin: Trump’s Economic Plan Is “Going To Start A Trade War With China.” Washington Post columnist Josh Rogin summed up Trump’s economic plan by saying it will “start a trade war with China”:

[Twitter, 9/15/16]

CNBC’s John Harwood: Trump Pushes “Divide Between His Non-College White Backers And [Clinton’s] Non-White Support” In Economic Remarks. CNBC correspondent John Harwood noted that “by accusing [Hillary Clinton] of ‘welfare check’ economics,” Trump pushed the divide between working class white and non-white voters:

[Twitter, 9/15/16]

CNBC’s Steve Liesman: Trump Tax And Spending Proposals “Would Mean Large Deficit [Increase].” CNBC senior economics reporter Steve Liesman attempted to fact-check Trump’s tax and spending proposal and concluded that it “would mean a large deficit [increase]”:

[Twitter, 9/15/16]

Huff. Post’s Christina Wilkie: Trump Economic Speech Largely “A Rehash Of Detroit Econ Speech” With An Unrealistic Energy Plan Thrown In. Huffington Post reporter Christina Wilkie lambasted Trump’s claim that his energy plan will add $20 trillion to the economy because it “omits that energy prices are so low right now that frackers can’t even afford to frack.” She also noted that despite claims that Trump would unveil new policies, the September 15 speech was largely a rehashing of an August 8 speech at the Detroit Economic Club:

[Twitter, 9/15/16, 9/15/16]

CBPP’s Chye-Ching Huang: One “Central Element of Trump’s” Economic Plan Is A “Major Tax Break For The Wealthiest Taxpayers.” Chye-Ching Huang, a tax policy analyst at the Center on Budget and Policy Priorities (CBPP), noted that a “central element” of Trump’s tax and economic plan remains a “major tax break for the wealthiest taxpayers”:

[Twitter, 9/15/16]

Slate’s Jordan Weissmann: “Trump’s Supply Side Advisors Have Effectively Transformed Him Into Jeb Bush.” Slate correspondent Jordan Weissmann mocked Trump’s claim that his tax plan will create 4 percent growth, comparing him to failed candidate Jeb Bush, who made the same promise. In response, NBC News reporter Benjy Sarlin noted that experts found promises of 4 percent growth were “pretty out there when Jeb made it too”:

[Twitter, 9/15/16, 9/15/16]

Huff. Post’s Igor Bobic Summed Up Trump’s Plan Simply: “A Total Fantasy.” Huffington Post associate politics editor Igor Bobic said “Trump’s budget plan, as his other plans, is a total fantasy”:

[Twitter, 9/15/16]

**This item has been updated with additional research

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