According to a new survey from the University of Chicago, vanishingly few economists agree with the claim of President Donald Trump’s administration that blowing up the deficit with tax cuts for the rich will pay for itself by generating new economic growth. Professional economists have warned of Trump’s economic agenda for over a year; when will news outlets stop taking his boasts seriously?
On April 26, the Trump administration unveiled a plan to slash taxes for high-income earners, and Treasury Secretary Steven Mnuchin implausibly claimed the tax proposal “will pay for itself” by stoking latent economic growth. Last week, a new survey by the University of Chicago’s Booth School of Business showed that almost no professional economists agree with Mnuchin’s prediction that the plan will “pay for itself.” A May 4 article in The Washington Post described the findings as proof that “economists aren't buying” the Republican Party’s trickle-down economic agenda while a May 5 article from Vox noted that the results were “a rare display of unanimity” among economists. In statements given to both outlets, Massachusetts Institute of Technology (MIT) economist David Autor described Trump’s tax cut plan as “a fiscal disaster.” The survey results showed only two of 37 economists who answered the question agree with the statement that Trump’s tax proposal “would likely pay for itself.” Both these economists later clarified that they misread the question and had meant to register their disapproval. Stanford economist Kenneth Judd later told the Post, “I screwed up on that one … I meant to say that this is a horrible idea, a bad idea -- no chance in hell.” From the University of Chicago:
This timely rebuke by economists of Trump’s economic smoke and mirrors seemed to have been lost on CNN, which spent much of May 5 promoting the inexplicable claim that unnamed “economists” think Trump's rhetoric alone had so far been enough to stoke economic growth. CNN host Jake Tapper falsely claimed “many economists credit” Trump’s promise of tax cuts, deregulation, and profligate spending for job creation since he took office. CNN chief business correspondent Christine Romans bizarrely claimed throughout the day that Trump’s “rhetoric” about the economy was responsible for a minuscule uptick in manufacturing sector employment, which rebounded substantially under former President Barack Obama.
The survey results showing that economists don’t trust Trump’s tax cutting agenda add to a growing body of evidence demonstrating that cutting taxes for the rich is a bad way to boost the economy. Nobel Prize-winning economist and New York Times columnist Paul Krugman called Trump’s trickle-down economic plan a return to the “voodoo economics” of the Bush and Reagan administrations and pointed to numerous examples of previous Republican administrations cutting taxes and not spurring growth. Independent research from the Congressional Research Service and Brookings Institution has been unable to find a causal relationship between tax cuts and economic growth, and many experts who hammered Trump’s fiscal policy proposals have pointed out that his restrictive approach to trade and immigration is likely to dampen economic activity, not enhance it.
Trump has been pilloried for having only a few credentialed economists on his economic policy team and 370 economists, including eight Nobel laureates, signed a letter denouncing his repeated lies and “conspiracy theories” about the state of the American economy. It is no wonder that Trump could not manage to garner the support of a single former member of the White House Council of Economic Advisers during his presidential campaign. What remains to be seen is why any media outlet, such as CNN last week, would take his positions seriously or accept his policy proposals at face value.