Thursday, October 27, 2016

Kristi Noem Is Either Out Of Her League Or Out Of Her Mind

     South Dakota's lone Congressional Representative, Republican Kristi Noem came up with such an outlandish promise yesterday that you really have to shake your head at her
Noem Pitches Her Tax Plan
Voodoo Economics?  Hallucinatory Is More Like It
(from KSOOradio.com)
disconnection from economic reality.  
She actually told Sioux Falls' KSOO radio that if a tax reform package that she favors were enacted in the United States we'd see an economic growth rate of

"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
Kristi-nomics
When You Wish Upon A Tax Cut
infrastructure and educated labor pools, both of which require higher taxes to achieve."  

     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.  
     

4 comments:

  1. First reaction: what the heck is she smoking?

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  2. To pimp her plan she should hire Tattoo from Fantasy Island to introduce it by saying, "De Plan! De Plan! Here comes De Plan."

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  3. Few people recall H.W. Bush referring to trickle-down or Reaganomics as "voodoo economics". He of course was right, but it has all been lost in the fact that the Reagan economic boost was notable, but temporary. Yet the voodoo remains.

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