The Wall Street Journal polled establishment economists and the result was predictable.
Electing Donald Trump will topple the economy.
— Wall Street Journal (@WSJ) March 10, 2016
According to the survey only the socialist Bernie Sanders would have a more detrimental impact on the economy.
The long shot Republican candidate John Kasich, who may or may not win the primary in his home state of Ohio, would not effect the economy negatively, according to the economists.
Democrat Hillary Clinton only presents a minor possibility of a downside and no economic change if she wins the election. A win by Kasich, Rubio or Cruz, a small minority of the economists believe, will result in a significant upside. Most believe there will be no change or somewhat of a downside if any of the establishment candidates win.
More of the Same—and Worse
Rubio would cut spending on everything but defense and Cruz would support a balanced budget amendment.
Republicans, however, talk big and accomplish little. The 2013 budget passed by the Republicans in the House was not balanced, kept unconstitutional spending in place, had a built-in deficit, and increased the national debt.
There is virtually no difference between Republicans and Democrats when it comes to taxing, borrowing and spending money. “The new Republican budget is gargantuan,” Laurence M. Vance wrote after the passage of a new budget resolution for fiscal year 2016.
“Republicans are proposing that the federal government spend $3.871 trillion in fiscal year 2016. That is almost as much as President Obama’s budget plan of $3.999 trillion. Where will the federal government get the $3.871 trillion to spend? Since it has no resources of its own, the answer is clear: from American taxpayers.”
Clinton’s economic plan includes goodies for her constituency—increasing the minimum wage, corporate profit-sharing, boosting the power of unions, and expanding the role of women in the economy, according to MSNBC.
Clinton, who is backed by Goldman Sachs and the bankers—along with Cruz and Rubio—will continue the neoliberal economic policies of her predecessors. In February she said she will not rule out appointing a Wall Street veteran to the top economic post in the White House.
“You have to have a Treasury Secretary who understands the economy, the American economy and the global economy,” Clinton said on NBC’s “Meet the Press.”
Voters in Michigan, who saw their jobs outsourced to Mexico and China under NAFTA—thanks primarily to her husband— rejected Clinton’s “populist” economic platform and voted instead for Bernie Sanders.
Both sides of the establishment party are basically in sync when it comes to Wall Street and the bankers (and are even more in agreement on foreign policy). “There is no real difference between Hillary Clinton and a conservative Republican,” writes Vance.
Trump Promises Across the Board Tax Cuts
Donald Trump believes the economic policies of the government will lead to disaster. “I hope I’m wrong, but I think we may be facing an economic crash like we’ve never seen before—probably sooner rather than later. The next president could be in office for a stock market crash worse than the one in 1929,” Trump warns.
Trump’s economic plan proposes cutting tax rates. “The government confiscates way too much of your paycheck,” he writes in Time to Get Tough, a book published in 2011.
Americans earning less than $30,000 a year would pay a mere 1% under his tax plan and millionaires 15%.
Most economists—although, apparently, not those polled by WSJ—understand cutting taxes produces economic growth.
“In sum, the U.S. tax system is a drag on the economy. Pro-growth tax reform that reduces the burden of corporate and personal income taxes would generate a more robust economic recovery and put the U.S. on a higher growth trajectory, with more investment, more employment, higher wages, and a higher standard of living,” writes William McBride for the Tax Foundation.
Sanders: Economic Disaster
The survey is correct about Bernie Sanders and probably understates the impact of his proposed economic policies.
Instead of cutting the tax rate of workers and the middle class, he would raise it significantly. According to the Tax Foundation’s Taxes and Growth Model released in January, the Sanders plan would significantly increase marginal tax rates and the cost of capital, which would lead to 9.5 percent lower GDP over the long term.
According to Tim Worstall and Forbes, “Bernie’s tax rates would simply be too high. They’d be over the revenue maximizing rate. We’d actually get more revenue with lower rates than what he’s proposing.
“On a static basis, the plan would lead to 10.56 percent lower after-tax income for all taxpayers and 17.91 percent lower after-tax income for the top 1 percent. When accounting for reduced GDP, after-tax incomes of all taxpayers would fall by at least 12.84 percent,” write Alan Cole and Scott Greenberg.
Instead of simplifying the tax code as proposed by Trump, Sanders would make it more complicated and byzantine. He would add four new income tax brackets for high-income households, with rates of 37 percent, 43 percent, 48 percent, and 52 percent.
“Unsurprisingly, Bernie has made it exceedingly apparent that he does not understand even the most basic economic concepts,” writes Will Tippens. “Due to his inability to understand how humans acting freely produce wealth, he views the individuals who make up the economy as an entity that should (and can) be nationalized and managed like a business, mercantilism and all.”