Thursday, September 15, 2016

Trump’s Penny Plan Does Not Add Up

Donald Trump apparently spoke at the New York Economic Club. Since I was not there, I do appreciate this fact sheet. At the risk of being rude, can I challenge the end of this “fact sheet”?
“The “Penny Plan” would reduce non-defense, non-safety net spending by one percent of the previous year’s total each year. Over ten years, the plan will reduce spending (outlays) by almost $1 trillion without touching defense or entitlement spending.”
So on average, we would see a 5% reduction per year in Federal nondefense government purchases if I read this right and that is supposed to average $100 billion per year. Of course nondefense Federal purchases last year were just shy of $500 billion so I am calling Trump on his awful arithmetic. I’m also calling him on this claim:
The Trump campaign's economist estimates that the plan would conservatively boost growth to 3.5 percent per year on average, well above the 2 percent currently projected by government forecasters, with the potential to reach a 4% growth rate.
Who are those “economists” again and what economic model did they use to make this rosy forecast? I could challenge his claim that the middle class will get the largest tax cut and his employment forecasts and just everything else in this spin sheet. But I did not wish to appear rude.