Sunday, October 2, 2016

Trump's Economic "Plan" in a Nutshell

Few of Trump's supporters really care about Trump's economic plan.  They believe that he really will make America great again.  Some voters may want to understand Trump's economic plan but they don't want to wade through the economic jargon.  This article provides all of the information that they need to know.

Since 1980 cutting taxes for the rich has been central to Republican economic policies.  Trump's plan does not deviate from that pattern.  The tax cuts in his plan would reduce tax revenues by $2.6 trillion over 10 years.  Deficit reduction is only important to Republicans when a Democrat is in office.  On the other hand, Trump's economic plan has some magic that is supposed to pay for the tax cuts.  The first bit of magic comes from deregulation.  It assumes that deregulation will stimulate economic growth that will increase tax revenue.  That might work if the US economy was burdened by excessive regulation.  Regulation in the US is not high relative to other advanced economies.  Consequently, few economists believe in deregulation magic.  Reducing the US trade deficit is another magic bullet.  The trade deficit would be reduced by the use of tariffs that would spark a trade war.  Most economists think that trade wars reduce growth.  Consequently, no prominent economists have endorsed Trump's economic plan.  It was patched together by a few economists who have no reputation to protect.  The real magic in Trump's economic plan is that many of his hard core supporters believe that he has their interest in mind.  Trump's plan consists primarily of tax cuts for the super rich sprinkled with fairy dust that compensates for the loss of tax revenue.

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