Thread: Hillary Clinton’s faulty economic plan

Stephen Moore


Stephen Moore is an economic consultant with Freedom Works.
He received a bachelor of arts degree from University of Illinois at
Urbana-Champaign and holds a master of arts degree in economics
from George Mason University.

Hillary Clinton’s faulty economic plan

Her recovery agenda risks another recession



Sunday, August 28, 2016

ANALYSIS/OPINION:
One of the dumbest statements in modern times was Speaker of the House Nancy Pelosi’s declaration that “the best way to stimulate the economy” is through food stamps and unemployment insurance.

This economic mumbo jumbo defies basic common sense and helps explain why we still have more than 40 million Americans on food stamps — evidently, the more that get free food, the more prosperous we become. This is the crux of the continuing curse of Keynesian economics, which says that the more the government spends, the more the economy grows. A dollar of government spending leads to as much as two dollars of additional economic output, according to Professor Pelosi.

Hillary Clinton is apparently one of Mrs. Pelosi’s A students. The entire Clinton recovery agenda is to spend $1 trillion more on government public works programs, free day care and college education, and expanded entitlements. She would raise investment and personal income tax rates (paid by many small businesses) to finance all of this.

Hillary has been parading around a study by economist Mark Zandi of Moodys, which claims that this fairy dust will mean happy days are here again. He claims millions of new jobs and billions in added output. But Mr. Zandi has been one of the wrongest economists in America for the past decade. It was Mr. Zandi who claimed massive job gains and GDP growth from the Obama stimulus plan with food stamps and other giveaways.

Oops. Instead we got what The Wall Street Journal recently disparaged as “the weakest recovery since the 1940s” with stagnant wages.

Meanwhile the Donald Trump economic plan is based on the idea that easing the burden of taxes and regulations on businesses and workers will kick start faster growth and bring high-paying manufacturing jobs back to America. (We are still one million manufacturing jobs shy of where we were in 2007).

Two new studies released in recent days verify that Mr. Trump’s tax plan will create millions more jobs and raise wages for American workers, while the Hillary Clinton tax and spend plan would shrink output and possibly throw the U.S. economy into another painful recession.

A just-released study prepared by the respected Beacon Hill Institute for the Dallas-based National Center for Policy Analysis finds that Hillary’s tax plan “would fund tens of thousands of government jobs at the cost of five times as many private sector jobs, while lowering personal income, GDP and business investment.” Business investment is already a major weak spot of the economy.

The study finds that the Clinton tax hikes would crush new investment and shrink GDP.

According to David Tuerck, the senior economist at Beacon Hill, “in the first year, real GDP would be more than half a percent less than under the Congressional Budget Office’s current baseline estimate, and almost 1 percent less in 2026.”

Given that the economy has only been growing at 1.2 percent over the past nine months, the Hillary tax and spend plan could plunge the U.S. economy into another deep recession if her tax hikes take effect. Over time the taxes and debt to pay for the government spending would mean five private sector jobs lost for every government job created.

“What we have here is a plan to destroy hundreds of thousands of private sector jobs just to pad government payrolls,” Mr. Tuerck concludes, “while, in the process, doing almost nothing to improve tax fairness.”

Then there is economist Larry Kotlikoff of Boston University, who has modeled the impact of the Trump plan to cut the U.S. business tax rate to 15 percent from as high as 35 percent today.

According to Mr. Kotlikoff, by reducing this tax rate on domestic production of goods and services, by 2020 the U.S. economy would be $1.34 trillion larger than otherwise. Wages would rise by 6 to 7 percent above the baseline. See chart.

I have known Professor Kotlikoff for years. He is a life long Democrat and tells me he is not even a Trump supporter. But he says Mr. Trump’s plan is far superior to Mrs. Clinton‘s. “Moving from our 35 percent corporate tax rate to Trump’s proposed 15 percent rate would,” he concludes, “produce a huge increase in capital, much of it coming from abroad.”

Who benefits the most from the Trump tax cut? Mr. Kotlikoff concludes: “This kind of reform has the potential to raise the income of the typical worker by as much as $4,000 per year within the next four years.”

That’s at least $4,000 more added income than middle class workers got after eight years of Obama policies.

Hillary Clinton’s campaign theme is that Donald Trump is “too risky” to put in the White House. But the biggest risk to America’s financially-stressed middle class is another gut-wrenching recession. It’s fairly simple. If these new studies are right, Hillary’s tax and spend economic plan may well lead us over that cliff.


• Stephen Moore is an economic consultant with Freedom Works and a senior economic consultant with the Trump campaign.

http://www.washingtontimes.com/news/...economic-plan/

Hillary Clinton: Nowhere girl

Her economic plan would leave the U.S. flirting with recession



Sunday, August 14, 2016

She’s a real nowhere girl. Sitting in her nowhere world. Making all her nowhere plans for nobody.

Poor Hillary Clinton. She’s trying so fervently to come up with at least one new, inspiring idea to jump-start a moribund economy and help the financially stressed-out middle class. She’s like the economics professor in “Ferris Bueller’s Day Off”: “Anyone? Anyone?” But the left’s idea cupboard is pitifully empty.

They literally, not figuratively, have nothing to offer except tax, spend, spin and then hit the button again.

So in her speech on Thursday on the economy, she proposed last week’s leftover cold porridge. And it doesn’t taste any better today than when President Obama first served it up.

In her missive on the economy, Hillary pledged a jobs program “within my first hundred days in office.” Sure. But her former boss, Barack Obama, has had not just 100 but closer to 3,000 days to come up with a jobs program. Where are the jobs? Where are the pay raises? Where is the growth?

Hillary is in the awkward position of having to praise the Obama recovery that has flatlined paychecks, left 94 million Americans outside the labor force, created the biggest deficits and national debt in world history, and has almost half of Americans thinking we are still in a recession or headed into a new one. Two-thirds of Americans think the American Dream is dead. Yet Hillary with a straight face complains that Mr. Obama doesn’t “get the credit he deserves” for the condition of the U.S. economy.

Of course, this actually is a good economy if you are one of those lucky few who can leverage political connections to give $250,000 speeches to Goldman Sachs. Then everything looks peachy.

What is the Hillary agenda, exactly? She’s touting “bold ideas” such as raising the minimum wage, making rich people pay more taxes, $250 billion more government spending on public works projects to featherbed her union pals.

We’ve had three minimum-wage increases this past decade and countless state and municipalities have gone as high as $10, $12 or even $15 an hour. This isn’t new. Mr. Obama has raised income taxes, estate taxes, dividend taxes, capital gains taxes, Medicare taxes, drug and vaccine taxes — all aimed at the rich. Income inequality has gotten worse under Mr. Obama.

She also wants free college tuition for the middle class, which just means people will pay for college through their taxes, not their tuition payments. That will obviously drive up college costs, just as the student loans have triggered dollar-for-dollar tuition hikes at major universities. (Donald Trump should declare no more federal aid to any college that has more than a $500 million endowment. The universities have become storehouses of wealth and it is time they use that money to make their schools affordable.)

On Obamacare, she promises to “double-down.” Wow. Nearly every single day we get more bad news on Obamacare. It’s the Hindenburg of health care.

Costs and premiums are rising in many states by double digits, the health care exchanges are going bankrupt, businesses are restricting hiring and hours worked to get around the law, and insurance companies are dropping out. Other than that, it has been a glorious success.

She wants to raise the capital gains tax to 46 percent. She wants to raise the tax on pass-through small- and medium-sized businesses to 45 percent. These are direct taxes on American employers and the risk-takers who invest in them. And if people are really successful in business and they dare get rich, the government will snatch almost half of their lifetime savings in taxes when they die under Hillary’s plan.

What kind of upside-down economic theory tells you that the way to get more jobs is to place higher taxes on the businesses that create the jobs? I have invented a term for this: economic bimboism. Mr. Trump needs to make this point over and over: He wants to tax businesses at 15 percent. She wants to tax them at 45 percent. Then ask the American people: Which will bring more jobs to America?

The Tax Foundation says that the Clinton tax and economic plan will actually reduce jobs by 300,000 and subtract from our already weakling economic growth rate. That means we will be flirting with recession.

In short, this nowhere girl has a nowhere plan — for nobody.

http://www.washingtontimes.com/news/...se-of-support/

The infrastructure illusion

Trump and Hillary want to spend more money on public works, and they’re both wrong



Sunday, August 7, 2016

Hillary Clinton and Donald Trump don’t agree on much of anything, but there is one area where they have a meeting of the minds: they both want to spend way more on public works programs. Hillary Clinton says that her primary jobs stimulus will be a massive $275 billion-plus infrastructure spending binge.

Donald Trump one-upped Hillary last week promising to spend twice that amount. He says the money is necessary because of crumbling roads and “bridges that are falling down.”

It’s a rare source of agreement, so wouldn’t you know it: they’re both wrong.

If our infrastructure is crumbling, it surely isn’t because the federal government is spending too little money. Public works projects were supposed to be the centerpiece of the Obama $830 billion stimulus bill. We were promised “shovel-ready” jobs. Remember that? But job growth has remained abysmal for seven years. So what happened to all that money? No one in Washington wants to ask or answer.

We now know a lot of the money didn’t even get spent on public works, but got intercepted for projects like the now-bankrupt Solyndra solar energy company and more still for food stamps and welfare programs. Some of President Obama’s spending went to build big white elephants like the $70 billion California high speed rail train from and to nowhere, or low-return investments such as the Washington Metro silver line with at least five cost overruns and almost no riders.

Over Mr. Obama’s presidency, Washington has spent nearly $1 trillion on infrastructure. As the chart shows, this was more money than any other president in history has spent. Amazingly, it cost about $250 billion to build the interstate highway system. Mr. Obama has spent at least three times more than that and we still have what more pot holes in America than jobs.

Yet here we are with Hillary arguing for bigger deficits and more public works projects as the engine for growth revival. (At least, Mr. Trump has a way to pay for infrastructure: he would allow companies to repatriate capital from abroad at a low tax rate and use the money raised to fix bridges and roads. He would also let an independent commission rather than politicians decide what projects should get funded.) The road builders, unions, municipal bond traders are drooling at the idea of all this money.

Davis Bacon rules make sure that nearly every penny goes to inflated union wages. For every three bridges we build, we could fix a fourth one for free just by jettisoning these costly regulatory hurdles. While Mr. Trump wants to deregulate to get more bang for our buck, Hillary is too beholden to special interests to allow that.

We also need to spend our federal infrastructure dollars on projects that make sense. The real transportation scandal is that Congress keeps stealing almost 20 cents of every dollar from gas taxes, paid by motorists, to pay for transit projects that carry less than 5 percent of all commuters — except for a few cities like New York. Congress keeps building mass transit trains even though in a decade or so bus and rail systems will go the way of rotary phones.

Driverless-cars and smart road/traffic light technologies will personalize transportation and enable cheap and speedy door to door delivery.

Most liberals I know hate cars and think, as Al Gore does, that the combustible engine in the automobile is going to burn up the planet. So why would we expect the same people who want to get motorists off the roads and into buses and on bicycles to fix the highways? I remember reading once from a prominent leftist thinker than traffic jams are good because they are the ultimate sign of democracy and fairness. They waste time for everyone and make us all equally miserable.

Hillary is the ultimate hypocrite on infrastructure because for the entire time she was secretary of State she postponed the building of the Keystone XL (Hillary opposes it) that would make oil and gas transportation cleaner and safer, create about 10,000 high paying jobs, and would not cost taxpayers a dime.

Nearly a dozen other cross-country pipelines have been blocked by the Obama-Clinton regulators, according to The Wall Street Journal. But Hillary is in the hip pocket of the radical greens who hate fossil fuels, so she is unlikely to approve any of them. We’ve spent $150 billion subsidizing green energy, but the oil and gas industry, which pays taxes, rather than consumes them, can’t get approval for its infrastructure projects. We also need liquefied gas terminals and refineries in America — but the government won’t those get built either.

The real infrastructure crisis in America is private infrastructure. Computers. Factories. Plants. Forklifts. Trucks. Warehouses. Businesses aren’t buying them because they are bleak about the future. Business spending over the past year is negative. Partly that’s because Mr. Obama has raised taxes on business investment. Hillary wants to raise the tax on private infrastructure financing again to as high as 45 percent. Donald Trump wants to cut those taxes to 15 percent. I wonder which will lead to more funding for bricks and mortar.

Amazing: Mr. Obama has spent more than any other president, he has borrowed $8 trillion, he has promised millions of jobs and yet after all of this, his own Transportation secretary has called America “one giant pot hole.” Now we’re supposed to forget all this and do it all over again.

http://www.washingtontimes.com/news/...-infrastructu/