Friday, June 19, 2015

Is Donald Trump a serious...

...candidate for president? In the video above, Fox News pundits Charles Krauthammer, Mara Liasson and George Will explain why they don't think so.

(I don't either, and expect Trump to drop out some time before the Iowa Caucuses. But my wife and I watched Trump's announcement speech again last night and both agreed that the Republican Party base will eat it up with a spoon. Was there anything in that speech that the average tea partier won't agree with?)

In the clip above, Ms. Liasson opines that besides Trump "the Republican field is big and serious." Really?

Let's consider what two of the "serious" GOP candidates said just this week.

First, frontrunner and establishment favorite Jeb Bush pledged on Monday to give the U.S. an economic growth rate of four percent a year (all emphasis mine):

“There is not a reason in the world why we cannot grow at a rate of 4 percent a year,” Bush said as he formally announced his presidential bid in Miami. “And that will be my goal as president — 4 percent growth, and the 19 million new jobs that come with it.”

Josh Barro, however, writes in the New York Times, "Economists on Bush’s Promise: Close to 0 Percent Chance of 4 Percent Growth":

Over the last 40 years, the American economy has grown at an average of 2.8 percent per year. That’s slower than the 3.7 percent average from 1948 to 1975, but the future looks even gloomier because that 2.8 figure relied on two favorable trends that are now over: women entering the work force, and baby boomers reaching their prime earning years.

After 2020, with the percentage of the American population that is of prime working age shrinking, the Congressional Budget Office expects growth to stabilize at 2.2 percent. Hitting Mr. Bush’s target would require nearly doubling that pace. It would mean exceeding the economic performance of every presidential administration since the Kennedy-Johnson years despite demographic headwinds caused by baby-boom retirements.

Not convinced? There are a ton of articles on the Internet in this vein. Here's one more, from Vox's Matthew Yglesias, "Jeb Bush's 4% growth promise is 104% nonsense":

It's an exciting idea that really would solve a lot of problems, allowing the country to expand opportunity down the socioeconomic ladder without needing to redistribute wealth away from those who already have it. Then again, if some obvious prescription existed to deliver that kind of rapid growth, you might think that Jeb's brother or his father would have hit upon the formula.

It is pretty unrealistic. Since Ronald Reagan's inauguration, the American economy has grown on average 2.7 percent per year.
Jeb is promising to do not just a little better than average, but DRAMATICALLY better than average. And he's promising to do so even though the aging of the population puts a natural check on growth, since as people become too old to work the economy loses output.

Meanwhile, another "serious" Republican candidate, Rand Paul, proposed a flat tax in The Wall Street Journal, "Blow Up the Tax Code and Start Over":

So on Thursday I am announcing an over $2 trillion tax cut that would repeal the entire IRS tax code—more than 70,000 pages—and replace it with a low, broad-based tax of 14.5% on individuals and businesses. I would eliminate nearly every special-interest loophole. The plan also eliminates the payroll tax on workers and several federal taxes outright, including gift and estate taxes, telephone taxes, and all duties and tariffs. I call this “The Fair and Flat Tax.”

Economist Jared Bernstein writes in the Washington Post, "The flat tax falls flat for good reasons":

Again with the flat tax?!

The idea always sounds appealing — at least I thought it did…read on — because everyone, present company included, hates the complexity in the tax code, and its proponents sell the flat tax as the perfect antidote.

Unfortunately, it’s far from perfect and in any real-world incarnation would be a lot worse than the current code on at least two key dimensions: fairness and fiscal. It’s a highly regressive tax that would mean the loss of gobs of revenue.

Our current federal income tax code is progressive (rates rise with income), and every distributional analysis I’ve ever seen of a flat tax shows a transfer of the tax burden from the wealthy to the middle class. According to the Tax Policy Center’s score of the Perry tax plan, the tax bill of families with incomes between $30,000 and 40,000 would go up by about $450, while that of millionaires would fall by about half a million bucks. 

It would also lower revenue by between $500 billion and $1 trillion per year.

From CNN Money, "Rand Paul's flat tax proposal: What it means for you":

But according to the Tax Foundation, a conservative leaning but non-partisan think tank that did see Paul's plan, wealthier taxpayers would be the big winner under the plan

The fact that everyone is paying less in taxes means the government would collect less tax money - about $2.9 trillion less over the course of the decade, according to the Tax Foundation.

Now those were just a couple of proposals from two candidates of the "big and serious" Republican field this week.

And Donald Trump is the "unserious" candidate in the race?


Ed Crotty said...

"In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread." ~ Anatole France

The Flat tax only works if you assume that the working poor and billionaires get the same utility ( Yes, I do have a BA in Economics!) out of a military that protects the sea lanes for the transport of oil as well as protecting oil platforms from protesters in the arctic and invades countries halfway around the world because they sit on a bed of oil. It would seem that the primary purpose of the Military is to protect US interests abroad. The working poor and even the middle class do not have any interests abroad. So by removing the military from their tax burden we can easily justify having a higher tax rate for the wealthy and corporations. Also - the Federal courts and Federal law enforcement focused on protecting Intellectual property, and The Department of State - they certainly have no value to the working poor.

The parts of the Government that do help the non-wealthy - like the EPA, Dept of Education, Health & Human Services - are the ones that the right-wingers all want to shut down.

Ed Crotty said...

"In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread." ~ Anatole France

In its equally majestic equality, the tax code compels rich and poor alike to pay to protect the interests of large corporations and their owners, but at home and abroad.