- By David FrancisDavid Francis is a staff writer for Foreign Policy, where he oversees FP's breaking news blog, The Cable. An award-winning journalist, David has reported from all over Europe, Nigeria, Kenya, Mexico, and Afghanistan on terrorism, national security, the geopolitics of energy, global economics, and the European financial crisis. His work has been published in outlets including the Christian Science Monitor, the Financial Times Deutschland, Slate, and SportsIllustrated.com.
Republican presidential nominee has plans for the economy. And they’re HUGE, if maddeningly vague and often untethered from fiscal reality.
Speaking at the Economic Club of New York, Trump outlined an economic blueprint he said would slash taxes and rejuvenate the economy, generating 4 percent annual GDP growth. That would be more than double the average growth this century. He also reiterated his plans to unleash fossil fuels and cut back on government regulation, both of which he says will further spur economic activity.
“My great economists don’t want me to say this, but I think we can do better than that,” he said of a 4 percent growth goal Thursday.
He then promised to add 25 million jobs to the economy over the next 10 years. Some perspective: according to Bloomberg, the most jobs ever created over such a period was 24.4 million added in the 10 years ended in March 2001. In the last decade, the United States has created 7.7 million jobs.
Trump also talked up his plans to slash taxes and somehow also trim the debt. Trump has promised three income tax brackets of 33 percent, 25 percent and 12 percent, down from seven brackets and a currently top rate of nearly 40 percent. He also wants to slash the corporate tax rate to 15 percent from about 35 percent now. In total, this would amount to $4.4 trillion in tax cuts.
He said these cuts would be offset by economic growth, But independent analysis has shown that tax cuts of that magnitude, unless offset by spending cuts he’s already ruled out, would increase the U.S. debt by trillions.
Trump also said he would eliminate taxes altogether for millions of low-income Americans while leaving social benefits like Social Security and Medicare untouched.
“Our plan will produce paychecks, and they’re going to be great paychecks for millions of people now unemployed,” he said.
Trump’s speech was met with immediate skepticism. “It’s going to be very hard to achieve 3.5 percent growth on a sustained basis” for any presidential candidate, Gennadiy Goldberg, a strategist at TD Securities in New York told Bloomberg, pointing to challenges both at home and abroad. “There have been a lot of barriers to that kind of growth — potential growth has come down, the barriers being a mature business cycle and weak global demand.”
The GOP nominee also said he would ensure every trade agreement adds to GDP growth; in the past, he has promised to tear many of them up. He also said he wants to create a “modern regulatory framework” to cut red tape. He also promised he would be “unleashing an energy revolution,” though he failed to note that the United States in the last eight years has already unleashed just such a revolution, becoming an oil and natural gas exporter for the first time in decades.
His plans, which puzzled most economists — Oxford Economics, a British forecasting firm, estimates his proposals would cut $1 trillion a year from the U.S. economy — definitely riled up environmentalists.
“The only thing associated with his campaign that remotely resembles ‘alternative energy’ are the flames from the dumpster fire that is Trump’s energy policy — and those are obviously unhealthy to be around,” Sierra Club Political Director Khalid Pitts said.
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