Reischauer: "It's Impossible."
Robert Reischauer, former CBO director
under Presidents George H. W. Bush and Clinton said: "It's impossible ... You get
growth because of investment, an increased labor force, a rise in human
capital, and innovation. Add all those components together and they don't sum
up to 5% given what the labor force is going to be and the investment
possibilities are." [Talking Points Memo, 6/8/11]
Klein: "This Plan Isn't Optimistic. ... It's A Joke." From a
June 7 post by Washington Post economic and political blogger Ezra
Klein:
Economic plans are often disappointing and underpowered. They're occasionally radical and even inspiring. They're frequently dull. They're rarely hilarious. But Tim Pawlenty's proposal is the exception. I'm going to quote from it extensively, because I don't want you to think I'm unfairly simplifying his ideas. Here's the big one:
Let's start with a big, positive goal. Let's grow the economy by 5 percent, instead of an anemic 2 percent.
Yes, let's! One small problem, though: There is no economist anywhere who knows how to add three percentage points to the country's growth. Goosing economic growth over any long period is is [sic] hard enough when you're talking about a tenth or two of a percent. Three percentage points? I've never seen anyone make that sort of a claim. But perhaps Pawlenty has stumbled upon something new:
It's been done before: Between 1983 and 1987, the Reagan recovery grew at 4.9 percent annually. Between 1996 and 1999, under President Bill Clinton and a Republican Congress, the economy grew at around 4.7 percent annually.
Read that sentence carefully: Pawlenty says he wants "5 percent growth." Later in his piece, he specifies "five percent economic growth over 10 years." And his evidence that "it's been done before"? Two periods in which growth was under five percent and held there for less than five years. So even in his handpicked examples, Pawlenty can't come anywhere close to his target.
[...]
Members of both parties have already proposed closing loopholes and lowering rates. Until Pawlenty, no one from either party, at least to my knowledge, predicted that doing so would lead to 10 years of 5 percent growth. And it's not as if politicians are known for being particularly pessimistic about the effects of their policies.
[...]
This plan isn't optimistic. It isn't a bit vague. It's a joke. And I don't know which is worse: The thought that Pawlenty knows that and went forward with this pandering, fantasy-based proposal anyway, or the thought that he doesn't know it, and he really thinks this could work. [The Washington Post, 6/7/11]
Linden: "Pawlenty's Tax Proposal Would Cost $7.8 Trillion Over Ten Years, Triple The Size Of Bush Tax Cuts." From a June 7 post on ThinkProgress by Michael Linden, Director of Tax and Budget Policy at the Center for American Progress Action Fund:
Earlier today, presidential candidate and former governor Tim Pawlenty (R-MN) outlined his economic policy "vision," which included several major proposals to cut taxes.
[...]
These proposals, taken together would bestow a massive tax cut on the wealthiest people in the country. They would also reduce overall federal revenues to a such a low level that even if Pawlenty's draconian, radical spending targets were achieved, deficits and debt would still soar out of control.
All together, Pawlenty's tax proposal would generate an average revenue level of just 13.6 percent of GDP from 2013-2021. That translates to a tax cut of $7.8 trillion, and that's on top of $2.5 trillion cost of extending all of the Bush tax cuts (see below for details on how this estimate was calculated).
Pawlenty also says that he will balance the budget, and cap spending at 18 percent of GDP. Unfortunately for Pawlenty, his tax plan leaves him about $8.4 trillion short. Given that reality, he can either embrace a huge middle-class tax increase, or give up his claims to a balanced budget. If he doesn't make up that revenue, deficits and debt will skyrocket, even if he does slash spending back to levels not seen in half a century. [Think Progress, 6/7/11, emphasis in the original]
Crowley: "[Pawlenty] Doesn't Mention ... That Both Those Periods Of Growth [He Cites] Followed Substantial Tax Increases." In a June 7 post on Time magazine's politics blog, Swampland, senior correspondent Michael Crowley wrote:
Pawlenty's plan, which he calls "A Better Deal," centers around tax reform -- similar to that proposed by Paul Ryan -- that would close tax loopholes and lower rates on individuals and corporations. His changes would overwhelmingly benefit the wealthiest taxpayers and corporations. Pawlenty would lower the corporate tax rate from 35% to 15%, and create two new income tax brackets at 10% and 25%. He would also completely eliminate taxes on capital gains, interest income and dividends -- a huge boon to wealthy investors -- as well as the estate tax, which currently applies only to the most valuable fraction of estates.
In what is essentially a supply-side argument, Pawlenty simply assumes that these changes will unleash dramatic economic growth of up to a 5% annualized rate, generating enough new tax revenue to cut the deficit by 40%.
[...]
But I suspect that economists who don't share his assumptions about the effect tax cuts for the wealthy will have on economic growth will find that this is not a realistic plan for paring down the national debt. What's more, you don't need to slash taxes to enjoy an economic boom. Pawlenty notes two recent periods when the U.S. economy grew at a 5% clip -- from 1983 and 1987 and from 1996 to 1999. What he doesn't mention is that both those periods of growth followed substantial tax increases. Bill Clinton's 1993 budget plan was derided as the biggest tax hike in history, but preceded an economic boom (also fueled by a tech explosion); and Ronald Reagan raised taxes three times during the early-middle 1980s. [Time, 6/7/11]
Former Boehner Staffer Galupo: "Tim Pawlenty Proposes Insane Economic Plan." In a June 7 U.S. News and World Report op-ed, titled "Tim Pawlenty Proposes Insane Economic Plan," Scott Galupo, who formerly worked for House Speaker John Boehner, wrote:
When consuming Gov. Tim Pawlenty's economic plan, be sure to take extra time to chew--it's gag-inducing.
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
