President Trump Right on Tax Reform, Slashing Regulation & Government Spending
President Donald Trump has the right ideas about cutting taxes, regulation, and government spending.
“If we want faster growth, the only recipe that gives you faster growth in the long run is increasing the productivity, the efficiency of your economy: Getting more output from your capital and labor,” Dan Mitchell said in an interview.
“Let’s lower the corporate tax rate, let’s reduce some red tape and regulation in the economy and Trump’s been pretty good about those things,” he said, “but for heaven’s sake, if he does not get serious about government spending, I worry that any tax cuts we get won’t be very sustainable.”
US Treasury Secretary Steven Mnuchin said economic growth of 3% is achievable in the next 2 years as The Trump Administration seeks tax cuts to create more incentives to work and invest.
The US economy has grown by 3.2% Y-Y on average since Y 1947, but never exceeded 3% during The Obama Admin.
Mr. Mitchell said it’s important to recognize that the private sector is more efficient at allocating resources, and that drives economic growth more than government spending does. The mainstream media tend to portray the US economy as static, so that tax cuts only shift money from public to private hands without boosting output.
“A lot of the establishment media does lean left and you see that on the types of issues I work on,” Mr. Mitchell said. “They always talk about the cost of a tax cut as if the money you earn belongs to the government and if you get to keep more of it somehow that’s a cost to the economy.”
“They think: let’s take money out of the economy’s right pocket, put it into the economy’s left pocket and pretend we have more money,” Mr. Mitchell said. “It did not work for Bush (43). It didn’t work for Hussein Obama. It did not work for Hoover. It did not work for Roosevelt. It has not worked for Japan.”
By Dan Mitchell
Paul Ebeling, Editor
Editor’s Note: Dan Mitchell is an economist and senior fellow at the Cato Institute
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