The AP is out with an article promoting a "study" by "experts" who look at the effect on the national debt of the economic plans of Hillary Clinton and Donald Trump. Ready for a surprise? Hillary Clinton's plan only would increase the national debt by a quarter of a trillion dollars over ten years. Trump's plan would increase the debt by ten trillion dollars during that same time. It's utter nonsense!
Interestingly, the so called "experts" only looked at the taxation side of the equation in detail. They ignored changes in spending. These same "experts" also only looked at a static analysis. In other words, they ignored the positive effect on economic growth that Trump's plan would have. They also ignored the fact that Clinton's plans would slow economic growth. In other words, this study by so called "experts" ignored reality in order to produce a document supporting Clinton and bashing Trump.
Here's a better way to look at the comparison. Hillary Clinton wants to raise taxes in a major way. She has said that the increase would be on the wealthy, but in Clinton parlance that means everyone who is not poor. Raising taxes only on the truly wealthy (the so called 1%) would not produce much more in the way of revenue. Those folks already pay huge amounts in taxes and further increases would lead to many of them altering their investments and their income streams to reduce taxes. Basically, if your family has income of $50,000 for the year, you could expect higher taxes from Hillary Clinton. The next effect of raising taxes like that would be to slow the economy. Instead of growing at 1% per year or less, we could watch the economy slip into recession. That would cause the amount spent by the federal government for welfare related programs like food stamps, housing subsidies, welfare, job training, and the like to soar. Most if not all of the additional taxes would go just to pay for the extra welfare spending that the tax increase would cause.
On the other hand, Trump wants a major tax cut. He also, however, wants major spending cuts. He wants to replace Obamacare with something much less expensive. Such a switch alone might save a quarter of a trillion dollars per year or 2.5 trillion dollars over the ten years that the "study" looked at. Trump also wants to eliminate a bunch of federal programs that amount to roughly 80 billion dollars per year. He also wants to take on fraud and abuse in Medicare and Social Security. That could easily be another 100 billion dollars. The most important thing about Trump's plans, however, is that he wants to cut taxes and simplify the tax code. He also wants to get rid of unnecessary regulations that are stifling business development. That should lead to a spurt in the growth rate for the economy. If Trump's plan gets just a 4% growth rate higher than Hillary's would, that would mean that at the end of his first term, Trump would see an economy about 3 trillion dollars larger than it would be under Clinton.
Let's take a moment to consider that extra 3 trillion dollars in the GDP. First of all, it would mean millions and millions of new jobs. It would mean that middle income Americans would see higher wages and incomes. It would provide the federal government with about an addition 600 billion dollars of tax revenue each year. It would also result in a massive reduction in the welfare expenses of the federal government. There's no need to subsidize unemployment compensation for people WITH JOBS. There's no need for food stamps for people with good paying work. There's no need to provide welfare payments for people who are supporting themselves through work. That reduction in spending would mean at least another 150 billion dollars in reduced expenses each year. That's a total of three quarters of a trillion dollars per year in additional revenue and reduced expenses as of the end of four years. Because the effect keeps growing, over ten years, it's a difference of more than ten trillion dollars.
So how much of this ten trillion dollars in additional revenue and reduced spending did the "experts" consider in their study? NONE OF IT! Not a penny!
And given that Hillary's tax plan would slow economic growth, how much of a slow down did the "experts" factor in to their analysis? After all, as the economy slows, tax revenues fall and the deficit widens. Guess what? They didn't consider that either.
So how could the "experts" do this kind of analysis without considering the effect on the economy that the plan would have? They say that it would be too speculative to consider anything other than a static analysis. Think about that. These people are projecting what will happen over the next ten years. Do you know what the next ten years will bring? Of course not. Neither do the "experts". By its very nature a study projecting the future is speculative. It's laughable for these "experts" to refuse to consider positive effects from Trump's plan or negative results from Hillary's and then to tell us it would be too speculative.
The reality is that this is just another of those studies that the media trots out from time to time to promote their point of view. They want Hillary to win. They understand that her economic plans will not help anyone but will lead to continuing stagnation at best. So they feed us "expert" opinion which is nothing more than political wishful thinking.
Interestingly, the so called "experts" only looked at the taxation side of the equation in detail. They ignored changes in spending. These same "experts" also only looked at a static analysis. In other words, they ignored the positive effect on economic growth that Trump's plan would have. They also ignored the fact that Clinton's plans would slow economic growth. In other words, this study by so called "experts" ignored reality in order to produce a document supporting Clinton and bashing Trump.
Here's a better way to look at the comparison. Hillary Clinton wants to raise taxes in a major way. She has said that the increase would be on the wealthy, but in Clinton parlance that means everyone who is not poor. Raising taxes only on the truly wealthy (the so called 1%) would not produce much more in the way of revenue. Those folks already pay huge amounts in taxes and further increases would lead to many of them altering their investments and their income streams to reduce taxes. Basically, if your family has income of $50,000 for the year, you could expect higher taxes from Hillary Clinton. The next effect of raising taxes like that would be to slow the economy. Instead of growing at 1% per year or less, we could watch the economy slip into recession. That would cause the amount spent by the federal government for welfare related programs like food stamps, housing subsidies, welfare, job training, and the like to soar. Most if not all of the additional taxes would go just to pay for the extra welfare spending that the tax increase would cause.
On the other hand, Trump wants a major tax cut. He also, however, wants major spending cuts. He wants to replace Obamacare with something much less expensive. Such a switch alone might save a quarter of a trillion dollars per year or 2.5 trillion dollars over the ten years that the "study" looked at. Trump also wants to eliminate a bunch of federal programs that amount to roughly 80 billion dollars per year. He also wants to take on fraud and abuse in Medicare and Social Security. That could easily be another 100 billion dollars. The most important thing about Trump's plans, however, is that he wants to cut taxes and simplify the tax code. He also wants to get rid of unnecessary regulations that are stifling business development. That should lead to a spurt in the growth rate for the economy. If Trump's plan gets just a 4% growth rate higher than Hillary's would, that would mean that at the end of his first term, Trump would see an economy about 3 trillion dollars larger than it would be under Clinton.
Let's take a moment to consider that extra 3 trillion dollars in the GDP. First of all, it would mean millions and millions of new jobs. It would mean that middle income Americans would see higher wages and incomes. It would provide the federal government with about an addition 600 billion dollars of tax revenue each year. It would also result in a massive reduction in the welfare expenses of the federal government. There's no need to subsidize unemployment compensation for people WITH JOBS. There's no need for food stamps for people with good paying work. There's no need to provide welfare payments for people who are supporting themselves through work. That reduction in spending would mean at least another 150 billion dollars in reduced expenses each year. That's a total of three quarters of a trillion dollars per year in additional revenue and reduced expenses as of the end of four years. Because the effect keeps growing, over ten years, it's a difference of more than ten trillion dollars.
So how much of this ten trillion dollars in additional revenue and reduced spending did the "experts" consider in their study? NONE OF IT! Not a penny!
And given that Hillary's tax plan would slow economic growth, how much of a slow down did the "experts" factor in to their analysis? After all, as the economy slows, tax revenues fall and the deficit widens. Guess what? They didn't consider that either.
So how could the "experts" do this kind of analysis without considering the effect on the economy that the plan would have? They say that it would be too speculative to consider anything other than a static analysis. Think about that. These people are projecting what will happen over the next ten years. Do you know what the next ten years will bring? Of course not. Neither do the "experts". By its very nature a study projecting the future is speculative. It's laughable for these "experts" to refuse to consider positive effects from Trump's plan or negative results from Hillary's and then to tell us it would be too speculative.
The reality is that this is just another of those studies that the media trots out from time to time to promote their point of view. They want Hillary to win. They understand that her economic plans will not help anyone but will lead to continuing stagnation at best. So they feed us "expert" opinion which is nothing more than political wishful thinking.
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