|Noem Pitches Her Tax Plan|
Voodoo Economics? Hallucinatory Is More Like It
"around 9.1 percent." This is so stunningly ridiculous that you have to wonder if the Congresswoman even listens to herself or simply reads from a prepared script without thinking through the words that she's uttering.
First off, a 9.1% growth rate in an advanced mature economy like ours is way beyond reach. This is more than twice what Donald Trump claims he can achieve, and he wants to lower corporate taxes (to 15%) by even more than Noem does (to 20%). Trump's draconian cut would at most, by even his reckoning, boost annual growth to 4%. How Noem comes up with her flight into the fantasyland of 9% is something I'd challenge her to support. I can comfortably say that no credible economist would back this up as a likelihood, much less a possibility.
Just to get some grounding, I consulted with my favorite economist (my daughter Emily, who was trained in the field at UC Berkeley), who dismissed Noem's claim out of hand. Emily notes that she "has yet to see a compelling example of where lowering taxes created that kind of growth." Adds Emily, "the problem is that those kinds of models make incorrect assumptions about how people spend their tax savings. Businesses tend to favor stable, solvent governments with good
When You Wish Upon A Tax Cut
The most recent round of tax cuts, early on in the George W. Bush administration, produced nothing in the way of notable economic growth. In fact, GWB's tax reductions in '01 and '03, were followed by one of the most calamitous economic debacles in history. Why and how Noem comes up with the assumption that her notion of cutting taxes will lead to unparalleled levels of economic growth is something I'd like to see her explain. Given the looney-tunes magnitude of her claims, I doubt that Noem can make a serious case.