Where's The Beef? - by Jerry Jasinowski
A popular TV commercial in the 1980s (that became a political ad) featured a customer played by actress Clara Peller in a fast food restaurant staring critically at a rather bleak looking hamburger. "Where's the beef?" she demanded.
I had the same reaction listening to Donald Trump's economic plan. At other times in other venues, Trump has pledged to eliminate the national debt, claiming once it could be done in eight years. But the plan he unfolded earlier this week would cost $4.4 trillion over a decade according to his own staff. That's a low estimate. Trump appears to have bought into the supply side mantra of tax cuts spurring economic growth that leads to more revenue. Others estimate the real cost of his proposals much higher.
Overall, Trump proposes huge spending increases for defense, veterans' benefits, health care and border control, but at the same time vows to cut nondefense budgets by 1 percent annually. He would not touch the real budget challenge - entitlement programs. Thus, all of Trump's cuts apply to only 15 percent of the budget. That would be debilitating to many important programs. Presumably health research, drug interdiction and environmental cleanup would take it on the chin, but Trump is oblivious to contradictions in his proposals.
Trump promises an array of tax cuts, collapsing the seven individual tax brackets into three with a top rate of 33 percent. The top capital gains rate would fall from 23.8 percent to 20 percent, and the corporate tax rate from 35 percent to 15 percent. Tax cuts are always popular but they tend to foster ever larger budget deficits.
To be fair, Secretary Clinton has advanced proposals that would cost an estimated $198 billion a year more than we are spending now, which is not exactly chump change. But she also proposes $1.1 trillion in tax increases over 10 years which would mostly offset the increased spending. Clinton's budget proposals are basically neutral.
Both Trump and Clinton are committed to huge increases in spending on infrastructure which is a prudent investment in the nation's future. I deem this a positive for both candidates though it seems unclear how it will be financed. I and others have advanced the notion of a new capital infrastructure trust fund financed by long term bonds, but neither of the candidates gets this deep into detail.
Trump has proposed a long-overdue campaign against excessive regulation, but the examples he cited - rules for power plant emissions, ground-level ozone and food safety - are likely to encounter stiff opposition. What we really need is an assault on the redundant and overlapping rules and paperwork requirements that afflict small business and discourage aspiring entrepreneurs. Still, Trump's anti-regulatory stance will be warmly received by small business.
Trump offered no evidence of understanding of the critical role of manufacturing in our economy or the unique challenges it faces. In contrast, Clinton offers an extensive multi-faceted program to support manufacturing. Trump's ill-considered attacks on free trade agreements could do untold damage to our manufacturing base that, according to the Peterson Institute, would destroy approximately five million jobs.
Given Trump's lack of political experience and command of complex economic issues, it is perhaps refreshing to note that he has apparently taken counsel from those with more experience and sharpened his message accordingly. Still, one would expect a businessman to be more sophisticated about economic issues than he is. Clinton has an excellent opportunity to point out the gaps in Trump's economic thinking during their debates if she can seize it.
Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. You can quote from this with attribution. Let me know if you would like to speak with Jerry. September 2016