Donald Trump is expected to tap Wilbur Ross for commerce secretary which would instantly boost an “America First Economy.” Ross has spent his career turning around undervalued or bankrupt companies. He would be an excellent Trump ally in putting America back to work rather than giving jobs away to China. Here’s what Ross wrote in the WSJ while campaigning for Trump:
Donald Trump will cut taxes, reduce regulation, unleash our abundant energy and eliminate our trade deficit through muscular trade negotiations that increase exports, reduce imports and eliminate cheating. These policies will double our economic growth rate, create 25 million new jobs, boost labor and capital incomes, generate trillions of additional tax revenues and reduce debt as a percentage of GDP.
Hillary Clinton’s plan points in the opposite direction. Her tax hikes on businesses and “the rich” reduce incentives to work and invest. She will increase the already staggering $2 trillion annual regulatory burden on the U.S. economy. She vows to put coal miners out of work and oil and natural gas on the back burner—raising energy prices and reducing America’s competitive advantage. After giving us three of the worst trade deals in U.S. history—Nafta in 1993, China’s 2001 entry into the World Trade Organization, the 2012 South Korea fiasco—the Clinton team is primed to pass the worst deal yet—the Trans-Pacific Partnership, which would decimate the American manufacturing base.
How this adds up to a better economic plan than Mr. Trump’s is as mysterious as it is counterintuitive. Yet economic pundits keep popping up like bad pennies to make the claim.
One reason is that most think tanks only consider the competing tax plans, not the overall economic plans. This has an inherent Democratic bias because Republican tax cuts viewed in isolation almost always reduce revenues. However, by failing to calculate the substantial positive revenue offsets of growth from the Trump plan’s other reforms, these tunnel-vision “experts” are missing the bigger picture.
Consider the nonpartisan Tax Foundation. It dynamically scored a revenue reduction under the Trump plan of $2.6 trillion and a modest $663 billion surplus for the Clinton plan over the next decade. These numbers suggest the Clinton plan is more fiscally responsible.
But in our dynamic scoring of Mr. Trump’s plan, we found that the positive revenue offsets from increased growth derived from reduced regulatory burdens, lower energy costs and the elimination of the U.S. trade deficit amount to $2.4 trillion. A rapid acceleration of growth also leads to a significant reduction of our debt burden relative to GDP, and when Mr. Trump’s spending cuts are added the plan achieves full revenue neutrality.
