President Donald Trump’s famous tax cut will allegedly pay for itself, according to the President.
However, as the Washington Post has revealed today, nobody agrees with that assessment.
The University of Chicago’s Booth School of Business conducts regular polls on controversial issues to find out what economists really think. Last week they published a survey on Trump’s tax plan.
Of the 37 respondents, only two of them agreed with the President’s analysis.
However, in a hilarious twist of fate, both hose economists have retracted their answers, saying they misunderstood the question.
One of the economists in question, Kenneth Judd, said “I screwed up on that one. I meant to say that this is a horrible idea, a bad idea – no chance in hell.”
The other responder in favor of Trump, Bengt Holmström of the Massachusetts Institute of Technology, confirmed via e-mail with the Washington Post that he has also read the question incorrectly.
That means that not a single economist in the poll conducted thought Trump’s plan would work. This strongly suggests that Trump will, yet again, not be able to deliver a campaign promise.
Republicans have reasoned for years that cutting taxes will encourage more Americans to go out and work, or invest their wages. The increased tax collected from those wages, and the investments gained, will cancel out the revenue lost in the initial tax cut.
Trump has dived head first into this fallacy and wants to slash taxes across the board without reducing government spending. You don’t need a college degree to figure out that’s not how it works.
Steven Mnuchin, the Treasury Secretary, told investors in Beverly Hills last week about this plan but offered little in the way of details.
He was quoted saying:
“We expect to pay for this through economic growth and through eliminating a lot of deductions.”
According to Mnuchin Trump’s economic policies will accelerate economic growth to as much as 3 percent a year, but economist Kenneth Judd strongly disagrees:
“The numbers do not add up. We say that about all the presidents and their plans, and this — this is orders of magnitude worse. The numbers are just in a different universe.”
When Trump’s plan fails, the government is going to have to borrow more to make up for the lost revenues. If it does, the additional debt could become a heavy burden to the economy, and no doubt working people are going to bear the brunt of it.
This really begs the question, how did Trump become such a successful businessman if he fails to grasp simple economic principles? Oh, that’s right, he rode his father’s success.