The GOP tax legislation will drastically increase the deficit and wreck the economy, top U.S. economists are warning.
This week, the University of Chicago’s Booth School of Business interviewed a panel of top economists spanning a wide number of specialties and political outlooks. The panel includes multiple Nobel Prize winners, White House veterans, and former presidents of the American Economic Association. They were asked about the Republican tax reform bills. The results weren’t encouraging.
The first question was straightforward. Would they agree that if the US passed a tax bill “similar to those currently moving through the House and Senate,” GDP would be “substantially higher a decade from now”? The 42 economists said it wouldn’t.
“Of course not,” said professor Austan Goolsbee, who served as chief economist for President Obama. “Does anyone care about actual evidence anymore?”
The economists argued that tax policy simply isn’t as powerful a lever as Republicans want to believe. “Tax policy appears to have little effect at the margin on GDP growth in OECD countries,” wrote MIT’s David Autor, an eminent trade economist.
“Doubt it will substantially change things either way,” wrote the University of Chicago’s Anil Kashyap. “Aside from the redistribution of wealth, hard to see this changing much,” wrote Richard Thaler, who just won the Nobel Prize in economics.
The only economist to say the bill would increase GDP was Stanford’s Darrell Duffie, and he added the concern: “Whether the overall tax plan is distributionally fair is another matter.”
“How could it be otherwise?” asked MIT’s Daron Acemoglu. “Cut taxes. Lose money. Repeat,” said Goolsbee. “This is at least is clear,” said Yale’s William Nordhaus: “No way the growth effects will be strong enough to offset the revenue losses.” Even Darrell Duffie, the sole economist who agreed that the bill would boost GDP, says the plan will pile on debt.
So here, then, is the verdict of the economics profession:
“The growth benefits of the Republican tax plans are either nonexistent or uncertain. The increase in debt, by contrast, seems certain.”
The It doesn’t sound like a good ‘deal’ for the American people.