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Posts Tagged ‘Bush’

I’m not a fan of President Bush. The first one or the second one.

Both adopted policies that, on net, reduced economic liberty.

Today, let’s focus on the recently deceased George H.W. Bush (a.k.a., Bush 41). By all accounts, he was a very good man, but that doesn’t mean he was a very good president. Or even a mildly good one.

Steve Moore’s column in the Washington Times is a damning indictment of his infamous read-my-lips tax betrayal.

Liberals love George H.W. Bush for the very tax increase betrayal that destroyed his presidency. …This was not just the political blunder of the half-century, it was a fiscal policy catastrophe. …What the history books are writing is that Mr. Bush showed political “courage” in breaking his “Read my lips: No new taxes” pledge, and he was thrown out of office for doing the right thing. Wrong. The quick story is that the Reagan expansion — in no small part due to the reduction of the highest tax rates from 70 percent to 28 percent — was shrinking deficit spending dramatically by the end of Ronald Reagan’s presidency. The budget deficit had fallen in half down to 2.9 percent of GDP by 1988. It was headed to below 2 percent if Mr. Bush simply had did nothing. …the 1990 budget deal became a license for Democrats to spend and spend. …Government expenditures accelerated at a faster pace than at any time in 30 years. In two years time, the domestic budget grew by almost 20 percent above inflation. …The tax increases either caused the recession or exacerbated it — ending the Reagan expansion. The economy lost 100,000 jobs and the unemployment rate rose and the unemployment rate rose from 5.5 percent to 7.4 percent. Real disposable income fell from 1990 to the eve of the 1992 election. If this tax hike was a success, so was the Hindenburg.

There’s a lot of good analysis in Steve’s column.

But I want to emphasize the part about the budget deficit being on a downward trajectory when Reagan left the White House. That’s absolutely accurate, as confirmed by both OMB and CBO projections.

All Bush needed to do was maintain the Gipper’s pro-market policies.

Unfortunately, he decided that “kinder and gentler” meant putting Washington first and giving politicians and bureaucrats more power over the economy.

And not just on fiscal policy.

Jim Bovard points out in USA Today that Bush 41 also had some very unseemly bouts of protectionism.

Bush was the most protectionist president since Herbert Hoover. Like Trump, he spoke of the need for level playing fields and fair trade. But Bush-style fairness gave federal bureaucrats practically endless vetoes over Americans’ freedom to choose foreign goods. Bush’s Commerce Department ravaged importers with one bureaucratic scam after another, using the dumping law to convict 97 percent of imports investigated, claiming that their prices were unfairly low to American producers (not consumers). Bush also ordered the U.S. International Trade Commission to investigate after ice cream imports threatened to exceed one percent of the U.S. market. And he perpetuated import quotas on steel and machine tools. …he slapped new textile import quotas on Nigeria, Indonesia, Egypt, the Philippines, Burma (now Myanmar), Costa Rica, Panama, Pakistan and many other nations. Mexico was allowed to sell Americans only 35,292 bras in 1989 — part of a byzantine regime that also restricted imports of tampons, typing ribbons, tarps, twine, table linen, tapestries, ties and thousands of other products.

To be fair, George H.W. Bush played a key role in moving forward NAFTA and the WTO/GATT, so his record on trade is mixed rather than bad.

Let’s return to the tax issue. Alan Reynolds explains that the Bush 41 tax hike was a painful example of the Laffer Curve in action.

The late President G.H.W. Bush famously reneged on his “no new taxes” pledge… The new law was intended to raise more revenue from high-income households and unincorporated businesses.  It was supposed to raise revenue partly by raising the top tax rate from 28% to 31% but more importantly by phasing-out deductions and personal exemptions… Treasury estimates expected revenues after the 1990 budget deal to be higher by a half-percent of GDP.  What happened instead is that revenues fell from 17.8% of GDP in 1989 to 17.3% in 1991, and then to 17% in 1992 and 1993.  Instead of rising from 17.8% of GDP to 18.3% as initial estimates assumed, revenues fell to 17%. …A recession began in October 1990, just as the intended tax increase was being enacted.  To blame the weak revenues of 1991-93 entirely on that brief recession begs the obvious question: To what extent was a recession that began with a tax increase caused or at least worsened by that tax increase?  …When discussing tax increases (or tax cuts), journalists and economists must take care to distinguish between intended effects on revenue and actual effects.

We’ll never know, of course, how the 1990 tax increase impacted the economy. As a general rule, I think monetary policy is the first place to look when assigning blame for downturns.

But there’s no question that the tax increase wasn’t helpful.

That being said, my biggest complaint about Bush 41 was not his tax increase. It was all the new spending.

Not just new spending in general. What’s especially galling is that he allowed domestic spending to skyrocket. Almost twice as fast as it increased under Obama and more than twice the rate of increase we endured under Clinton and Carter.

The opposite of Reaganomics, to put it mildly.

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Steve Moore and Art Laffer are the authors of Trumponomics, a largely favorable book about the President’s economic policy.

I have a more jaundiced view about Trump.

I’m happy to praise his good policies (taxes and regulation), but I also condemn his bad policies (spending and trade).

And as you might expect, some people are completely on the opposite side from Moore and Laffer.

Writing for New York, Jonathan Chait offers a very unfriendly review of the book. He starts by categorizing Steve and Art (as well as Larry Kudlow, who wrote the foreword) as being fixated on tax rates.

The authors of Trumponomics are Larry Kudlow (who left in the middle of its writing to accept a job as director of the National Economic Council), Stephen Moore, and Arthur Laffer. The three fervently propound supply-side economics, a doctrine that holds that economic performance hinges largely on maintaining low tax rates on the rich. …Kudlow, Moore, and Laffer are unusually fixated on tax cuts, but they are merely extreme examples of the entire Republican Establishment, which shared their broad priorities.

For what it’s worth, I think low tax rates are good policy. And I suspect that the vast majority of economists will agree with the notion that lower tax rates are better for growth than high tax rates.

But Chait presumably thinks that Larry, Steve, and Art overstate the importance of low rates (hence, the qualification about “economic performance hinges largely”).

To bolster his case, he claims advocates of low tax rates were wrong about the 1990s and the 2000s.

In the 1990s, the supply-siders insisted Bill Clinton’s increase in the top tax rate would create a recession and cause revenue to plummet. The following decade, they heralded the Bush tax cuts as the elixir that had brought in a glorious new era of prosperity. …The supply-siders have maintained absolute faith in their dogma in the face of repeated failure by banishing all doubt. …they have confined their failed predictions to the memory hole.

If Chait’s point is simply that some supply-siders have been too exuberant at times, I won’t argue. Exaggeration, overstatement, and tunnel vision are pervasive on all sides in Washington.

Heck, I sometimes fall victim to the same temptation, though I try to atone for my bouts of puffery by bending over backwards to point out that taxation is just one piece of the big policy puzzle.

Which is why I want to focus on this next excerpt from Chait’s article. He is very agitated that the book praises the economic performance of the Clinton years and criticizes the economic performance of the Bush years.

A brief economic history in Trumponomics touts the gains made from 1982 to 1999, and laments “those gains stalled out after 2000 under Presidents George W. Bush and Barack Obama.” Notice, in addition to starting the Reagan era in 1982, thus absolving him for any blame for the recession that began a year into his presidency, they have retroactively moved the hated leftist Bill Clinton into the right-wing hero camp and the beloved conservative hero George W. Bush into the failed left-wing statist camp.

Well, there’s a reason Clinton is in the good camp and Bush is in the bad camp.

As you can see from Economic Freedom of the World (I added some numbers and commentary), the U.S. enjoyed increasing economic liberty during the 1990s and suffered decreasing economic liberty during the 2000s.

For what it’s worth, I’m not claiming that Bill Clinton wanted more economic liberty or that George W. Bush wanted more statism. Maybe the credit/blame belongs to Congress. Or maybe presidents get swept up in events that happen to occur when they’re in office.

All I’m saying is that Steve and Art are correct when they point out that the nation got better overall policy under Clinton and worse overall policy under Bush.

In other words, Clinton’s 1993 tax increase was bad, but it was more than offset by pro-market reforms in other areas. Likewise, Bush’s tax cuts were good, but they were more than offset by anti-market policies in other areas.

P.S. Chait complained about Moore and Laffer “starting the Reagan era in 1982, thus absolving him for any blame for the recession that began a year into his presidency”.

Since I’m a fan of Reaganomics, I feel compelled to offer three comments.

  • First, the recession began in July 1981. That’s six months into Reagan’s presidency rather than one year.
  • Second, does Chait really want to claim that the downturn was Reagan’s fault? If so, I’m curious to get his explanation for how a tax cut that was signed in August caused a recession that began the previous month.
  • Third, the recession almost certainly should be blamed on bad monetary policy, and even Robert Samuelson points out that Reagan deserves immense praise for his handling of that issue.

P.P.S. Bill Clinton’s 1993 tax hike didn’t produce the budget surpluses of the late 1990s. If you don’t believe me, check out the numbers from Bill Clinton’s FY1996 budget.

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When I gave speeches during Obama’s time in office, especially to audiences with a lot of Republicans, I sometimes asked a rhetorical question about whether they approved of presidents who increased spending, bailed out big companies, expanded the power of the Washington bureaucracy, imposed more red tape, and supported Keynesian stimulus schemes.

They understandably assumed I was talking about Obama, so they would always expressed disapproval.

I then would startle the audience (and sometimes make myself unpopular) by stating that I was describing economic policy during the Bush years.

To be sure, there were some differences. I would give Bush a better grade on tax policy. But Obama got a better score (or, to be more accurate, a less-worse score) on government spending. But the overall impact of both Bush and Obama, as confirmed by the declining score for the United States from Economic Freedom of the World, was a loss of economic liberty.

This bit of background is important because any analysis of economic policy during the Obama years reveals that “hope and change” somehow became “more of the same.”

At least for economic policy. When I examined the economic record of George W. Bush, there were a lot of items to include in the “anti-growth policy” portion of the bar chart, but not much for the “pro-growth policy” section.

And now that we’re doing the same exercise for the Obama years, we get a chart that looks very similar. The specific policies have changed, of course, but the net result is the same. Bigger role for the state, less breathing room for the private sector and civil society.

That’s a rather disreputable collection of policies, including the faux stimulus, the cash-for-clunkers boondoggle, the Dodd-Frank regulatory orgy, and the costly Obamacare disaster. And it’s worth noting that the one good policy that occurred during Obama’s policy, the Budget Control Act and the resulting automatic budget cuts (a.k.a., sequester), happened over his strenuous (and silly) objections.

By the way, I don’t think that Obama and Bush share the same ideology. My guess is that Obama has a very strident left-wing mindset and that he was telling the truth when he said he wanted to be a statist version of Ronald Reagan. I’m quite relieved that he was largely ineffective in achieving his goals.

Bush, by contrast, presumably didn’t want to significantly expand the size and scope of the federal government. But lacking a Reagan-style commitment to principles of limited government, his administration largely surrendered to public choice-driven incentives that resulted in incremental statism.

The lesson for the rest of us is that people should be less partisan and more principled. A bad policy doesn’t become good simply because a politician belong to the “R” team rather than “D” team.

Anyhow, the bottom line is that Obama era moved America in the wrong direction. For what it’s worth, he wasn’t nearly as bad as Nixon. And if I do this same exercise for LBJ, Hoover, and FDR, I expect Obama won’t be as bad as them, either.

But wouldn’t it have been nice if he had been as good as Bill Clinton?

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Back in 2013, I did an assessment of economic policy changes that occurred during the Clinton Administration.

The bottom line was that the overall burden of government declined by a semi-significant amount. Which presumably helps to explain why the economy enjoyed good growth and job creation in the 1990s, especially in the last half of the decade when most of the pro-growth reforms were enacted.

The chart I prepared has been very helpful when speaking to audiences about what actually happened during the Clinton years, so I decided to do the same thing for other presidents.

A week ago, I put together my summary of economic policy changes during the Nixon years. At the risk of understatement, it was a very grim era for free markets.

A few days ago, I followed up with a look at overall economic policy during the Reagan years. That was a much better era, at least for those of us who favor economic liberty over statism.

Now it’s time to look at the record of George W. Bush. It’s not a pretty picture.

I think the TARP bailout was the low point of the Bush years, though he also deserves criticism for big spending hikes (especially the rapid rise of domestic spending), additional red tape, special-interest trade taxes, and more centralization of education.

On the plus side, there was a good tax cut in 2003 (the 2001 version was mostly Keynesian and thus didn’t help growth), as well as some targeted trade liberalization. Unfortunately, those good reforms were swamped by bad policy.

As has been the case for other presidents, my calculations are based solely on policy changes. Presidents don’t get credit or blame for policies they endorsed or opposed. So when fans of President Bush tell me he was better on policy than his record indicates, I shrug my shoulders (just like I don’t particularly care when Republicans on Capitol Hill tell me that Clinton’s good record was because of the post-1994 GOP Congress).

I simply want to show where policy improved and where it deteriorated when various presidents were in office. Other people can argue about the degree to which those presidents deserve credit or blame.

In the case of Bush, for what it’s worth, I think he does deserve blame. None of the bad laws I listed were enacted over his veto.

Incidentally, I was torn by how to handle monetary policy. The artificially low interest rates of the mid-2000s contributed to the housing bubble and subsequent financial meltdown. Should I have blamed Bush for that because of his Federal Reserve appointments?

On a related note, the affordable lending mandates of Fannie Mae and Freddie Mac were made more onerous during the Bush years, thus exacerbating perverse incentives in the financial sector to make unwise loans. Was that Bush’s fault, or were those regulations unavoidable because of legislation that was enacted before Bush became President?

Ultimately, I decided to omit any reference to the Fed, as well as Fannie and Freddie. But I double-weighted TARP, both because it was awful economic policy and because that was a way of partially dinging Bush for his acquiescence to bad monetary and housing policy.

If there’s a lesson to learn from this analysis of Bush policy, it is that party labels don’t necessarily have any meaning. The economy suffers just as much if a Republican expands the burden of government as it does when the same thing happens under a Democrat.

P.S. I haven’t decided whether to replicate this exercise for pre-World War II presidents. If I do, Calvin Coolidge and Grover Cleveland presumably would look very good.

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I’ve learned that it’s more important to pay attention to hard numbers rather than political rhetoric. Republicans, for instance, love to beat their chests about spending restraint, but I never believe them without first checking the numbers. Likewise, Democrats have a reputation as big spenders, but we occasionally get some surprising results when they’re in charge.

President Obama was especially hard to categorize. Republicans automatically assume he was profligate because he started his tenure with a Keynesian spending binge and the Obamacare entitlement. But after a few years in office, some were arguing he was the most frugal president of modern times.

Or, to be more accurate, what I basically discovered is that debt limit fights, sequestration, and government shutdowns were actually very effective. Indeed, the United States enjoyed a de facto spending freeze between 2009 and 2014, leading to the biggest five-year reduction in the burden of federal spending since the end of World War II. And it’s unclear that Obama deserves any of the credit since he was on the wrong side of those battles.

Anyhow, I’ve decided to update the numbers now that we have 8 years of data for Obama’s two terms.

But first, a brief digression on methodology: All the numbers you’re about to see have been adjusted for inflation, so these are apples-to-apples comparisons. Moreover, all my calculations are designed to show average annual increases. I also made sure that the “stimulus” spending that took place in the 2009 fiscal year was included in Obama’s totals, even though that fiscal year began (on October 1, 2008) while Bush was President.

We’ll start with a look at total outlays. On this basis, Obama is actually the most conservative President since World War II. And Bill Clinton is in second place.

But total outlays doesn’t really capture a President’s track record because interest payments are included, which effectively means they get blamed for all the debt run up by their predecessors.

So if we remove payments for net interest, we get a measure of what is called primary spending (total outlays minus net interest). As you can see, Obama is still in first place and Reagan jumps up to second place.

I would argue that one other major adjustment is needed to make the numbers more accurate.

There have been two major financial bailouts in the past 30 years, the savings & loan bailout in the late 1980s and the TARP bailout at the end of last decade. Those bailouts created big one-time expenses, followed by an influx of money (from asset sales and repaid loans) that actually gets counted as negative spending.

Those bailouts added a big chunk of one-time spending at the end of the Reagan years and at the end of the George W. Bush years, while then producing negative outlays during the early years of the George H.W. Bush Administration and Obama Administration.

So if we take out the one-time effects of those two bailouts (which I categorize as “non-TARP” for reasons of brevity), we get a new ranking.

Reagan is now in first place, followed by Clinton and Obama.

By the way, Lydon Johnson has been in last place regardless of how the numbers are calculated, and George W. Bush has had the second-worst numbers.

For all intents and purposes, the above numbers are how a libertarian would rank the various Presidents since both domestic spending and military spending are part of the calculations.

So let’s close by looking at how a conservative would rank the presidents, which is a simple exercise because all that’s required is to remove military spending. Here are the numbers showing the average inflation-adjusted increase in overall domestic outlays for various Presidents (still excluding the one-time bailouts, of course).

By this measure, Reagan easily is in first place. Though it’s worth noting that three Democrats occupy the next positions (though Obama’s numbers are no longer impressive), while Republicans (along with LBJ) get the worst scores.

The bottom line is that Reaganomics was a comparative success. But should we also conclude that Obama was a fiscal conservative?

I don’t think he deserves credit, but I won’t add anything to what I wrote above. Instead, I’ll simply note that Brian Riedl of the Manhattan Institute has a good analysis of Obama’s fiscal record. Here’s his conclusion.

It is important to recognize that Obama did not stop trying to expand government after 2010. The president’s eight annual budget requests gradually upped their 10-year revenue demands from $1.3 trillion to $3.4 trillion, while proposing an average of $1.0 trillion in new program spending over the next decade. His play, in short, was to gradually trim the budget deficit by chasing large spending increases with even larger tax increases. The Republican Congress stopped him. My assessment: Obama’s most important fiscal legacy was a sin of omission. Despite promising to confront Social Security and Medicare’s unsustainable deficits, the president refused to endorse any plan that would come close to achieving solvency. This surrendered eight crucial years of baby-boomer retirements while costs accelerated. With baby boomers retiring and a national debt projected to exceed $90 trillion within 30 years, this was no small surrender.

In other words, the relatively good short-run numbers were in spite of Obama. And the long-run numbers were bad – and still are bad – because he chose to let the entitlement problem fester. But he was still better (less worse) than Bush I, Bush II, and Nixon.

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When I get my daily email from the editorial page of the New York Times, I scroll through to see whether there’s anything on economic issues I should read.

As a general rule, I skip over Paul Krugman’s writings because he’s both predictable and partisan. But every so often, his column will grab my attention, usually because the headline will include an assertion that doesn’t make sense.

The bad news is that this is usually a waste of time since most of his columns are ideological rants. But the good news is that I periodically catch Krugman making grotesque errors when he engages in actual analysis. Here are a few examples:

  • Earlier this year, Krugman asserted that America was outperforming Europe because our fiscal policy was more Keynesian, yet the data showed that the United States had bigger spending reductions and less red ink.
  • Last year, he asserted that a supposed “California comeback” in jobs somehow proved my analysis of a tax hike was wrong, yet only four states at the time had a higher unemployment rate than California.
  • And here’s my favorite: In 2012, Krugman engaged in the policy version of time travel by blaming Estonia’s 2008 recession on spending cuts that took place in 2009.

And if you enjoyed those examples, you can find more of the same by clicking here, here, here, here, here, here, here, and here.

But perhaps he’s (sort of) learning from his mistakes. Today, we’re going to look at Paul Krugman’s latest numbers and I’ll be the first to say that they appear to be accurate.

But accurate numbers don’t necessarily lead to honest analysis. Krugman has a post featuring this chart, which is supposed to show us that GOP presidential candidates are wrong to pursue “Bushonomics.”

In looking at this chart and seeing how Krugman wants it to be interpreted, I can’t help but think of the famous zinger Reagan used in his debate with Jimmy Carter: “there you go again.”

Let’s consider why he’s wrong.

First, he asserts the chart is evidence that GOP candidates shouldn’t follow Bushonomics.

I actually agree. That’s because the burden of government spending jumped significantly during the Bush years and the regulatory state became more oppressive. All things considered, Bush was a statist.

Krugman, however, would like readers to believe that Bush was some sort of Reaganite. That’s where we disagree. And if you want to know which one of us is right, just check what happened to America’s rating in Economic Freedom of the World during the Bush years.

Second, Krugman would like readers to think that Presidents have total control over economic policy. Yet in America’s separation-of-powers system, that’s obviously wrong. You also need to consider what’s happening with the legislative branch.

So I added a couple of data points to Krugman’s chart. And, lo and behold, you can just as easily make an argument that partisan control of Congress is the relevant variable. As you can see, Republican control of Congress boosted job growth for Obama, whereas the Democratic takeover of Congress led to bad results during the Bush years.

By the way, I don’t actually think congressional control is all that matters. I’m simply making the point that it is misleading to assert that control of the White House is all that matters.

What is important, by contrast, are the policies that are being implemented (or, just as important, not being implemented).

And since the economic policies of Bush and Obama have been largely similar, the bottom line is that it’s disingenuous to compare job creation during their tenures and reach any intelligent conclusions.

Third, since Krugman wants us to pay attention to job creation during various administrations, we can play this game – and actually learn something – by adding another president to the mix.

Krugman doesn’t identify his data source, but I assume he used this BLS calculation of private employment (or something very similar).

So I asked that website to give me total private employment going back to the month Reagan was nominated.

And here’s what I found. As you can see, good private-sector job growth under Reagan and Clinton, but relatively tepid job growth this century.

Now let’s take a closer look at the total change in private employment for the first 81 months of the Reagan, Bush, and Obama Administrations. And you’ll see that Krugman was sort of right, at least in that Obama has done better than Bush.

And if there’s no recession before he leaves office, he’ll look even better than Bush than he does now. But Obama doesn’t fare well when compared against Reagan.

So does this mean Krugman will now argue GOP candidates should follow Reaganomics rather than Obamanomics or Bushonomics?

I’m not holding my breath waiting for him to make a correction. By the way, keep in mind what I said before. Presidents (along with members of Congress) don’t have magical job-creation powers. The best you can hope for is that the overall burden of government diminishes a bit during their tenure so that the private sector can flourish.

That’s what really enables job creation, and that’s the lesson that really matters.

But it’s not easy to find the truth if you put partisanship above analysis. Krugman erred by making a very simplistic Bush-Republican-bad/Obama-Democrat-good argument.

In reality, the past several decades show that it’s more important to look at policy rather than partisan labels. For instance, the fiscal policies of Ronald Reagan and Bill Clinton are relatively similar and are in distinct contrast to the more profligate fiscal policies of George W. Bush and Barack Obama.

P.S. Paul Krugman’s biggest whopper was about healthcare rather than fiscal policy. In 2009, he said “scare stories” about government-run healthcare in Great Britain “are false.” But you can find lots of scary stories here.

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I’m pleasantly surprised by the tax plans proposed by Marco Rubio, Rand Paul, Jeb Bush, and Donald Trump.

In varying ways, all these candidate have put forth relatively detailed proposals that address high tax rates, punitive double taxation, and distorting tax preferences.

But saying the right thing and doing the right thing are not the same. I just did an interview focused on Donald Trump’s tax proposal, and one of my first points was that candidates may come up with good plans, but those proposals are only worthwhile if the candidates are sincere and if they intend to do the heavy lifting necessary to push reform through Congress.

Today, though, I want to focus on another point, which I raised starting about the 0:55 mark of the interview.

For the plans to be credible, candidates also need to have concomitant proposals to restrain the growth of federal spending.

I don’t necessarily care whether they balance the budget, but I do think proposals to reform and lower taxes won’t have any chance of success unless there are also reasonable plans to gradually shrink government spending as a share of economic output.

As part of recent speeches in New Hampshire and Nevada, I shared my simple plan to impose enough spending restraint to balance the budget in less than 10 years.

But those speeches were based on politicians collecting all the revenue projected under current law.

By contrast, the GOP candidates are proposing to reduce tax burdens. On a static basis, the cuts are significant. According to the Tax Foundation, the 10-year savings for taxpayers would be $2.97 trillion with Rand Paul’s plan, $3.67 trillion under Jeb Bush’s plan, $4.14 trillion with Marco Rubio’s plan, all the way up to $11.98 trillion for Donald Trump’s plan.

Those sound like very large tax cuts (and Trump’s plan actually is a very large tax cut), but keep in mind that those are 10-year savings. And since the Congressional Budget Office is projecting that the federal government will collect $41.58 trillion over the next decade, the bottom line, as seen in this chart, is that all of the plans (other than Trump’s) would still allow the IRS to collect more than 90 percent of projected revenues.

Now let’s make the analysis more realistic by considering that tax cuts and tax reforms will generate faster growth, which will lead to more taxable income.

And the experts at the Tax Foundation made precisely those calculations based on their sophisticated model.

Here’s an updated chart showing 10-year revenue estimates based on “dynamic scoring.”

The Trump plan is an obvious outlier, but the proposals from Jeb Bush, Rand Paul, and Marco Rubio all would generate at least 96 percent of the revenues that are projected under current law.

Returning to the original point of this exercise, all we have to do is figure out what level of spending restraint is necessary to put the budget on a glide path to balance (remembering, of course, that the real goal should be to shrink the burden of spending relative to GDP).

But before answering this question, it’s important to understand that the aforementioned 10-year numbers are a bit misleading since we can’t see yearly changes. In the real world, pro-growth tax cuts presumably lose a lot of revenue when first enacted. But as the economy begins to respond (because of improved incentives for work, saving, investment, and entrepreneurship), taxable income starts climbing.

Here’s an example from the Tax Foundation’s analysis of the Rubio plan. As you can see, the proposal leads to a lot more red ink when it’s first implemented. But as the economy starts growing faster and generating more income, there’s a growing amount of “revenue feedback.” And by the end of the 10-year period, the plan is actually projected to increase revenue compared to current law.

So does this mean some tax cuts are a “free lunch” and pay for themselves? Sound like a controversial proposition, but that’s exactly what happened with some of the tax rate reductions of the Reagan years.

To be sure, that doesn’t guarantee what will happen if any of the aforementioned tax plans are enacted. Moreover, one can quibble with the structure and specifications of the Tax Foundation’s model. Economists, after all, aren’t exactly famous for their forecasting prowess.

But none of this matters because the Tax Foundation isn’t in charge of making official revenue estimates. That’s the job of the Joint Committee on Taxation, and that bureaucracy largely relies on static scoring.

Which brings me back to today’s topic. The good tax reform plans of certain candidates need to be matched by credible plans to restrain the growth of federal spending.

Fortunately, that shouldn’t be that difficult. I explained last month that big tax cuts were possible with modest spending restraint. If spending grows by 2 percent instead of 3 percent, for instance, the 10-year savings would be about $1.4 trillion.

And since it’s good to reduce tax burdens and also good to restrain spending, it’s a win-win situation to combine those two policies. Sort of the fiscal equivalent of mixing peanut butter and chocolate in the famous commercial for Reese’s Peanut Butter Cups.

P.S. Returning to my interview embedded above, I suppose it’s worthwhile to emphasize a couple of other points.

P.P.S. Writing about the prospect of tax reform back in April, I warned that “…regardless of what happens with elections, I’m not overly optimistic about making progress.”

Today, I still think it’s an uphill battle. But if candidates begin to put forth good plans to restrain spending, the odds will improve.

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