Right-wing media figures have been hyping the economic plan that GOP presidential contender Tim Pawlenty presented in a June 7 speech. But economic experts, including prominent conservative economists, have called Pawlenty's plan unrealistic, "a joke," and "patently ridiculous."
Pawlenty: "A Tim Pawlenty Plan For Recovery." In a June 7 op-ed in The Chicago Tribune, Republican presidential candidate Tim Pawlenty outlined his plan for economic growth. From the Tribune:
Let's start with a big, positive goal. Let's grow the economy by 5 percent, instead of an anemic 2 percent.
But just changing business tax rates is not enough. That's because we know most job growth will come from small and medium-size businesses, and their owners are taxed under individual tax rates, not corporate rates. So, pro-job and pro-growth tax reform must include individual tax reform as well.
Five percent economic growth over 10 years would generate $3.8 trillion dollars in new tax revenues. With that, we would reduce projected deficits by 40 percent -- all before we made a single budget cut.
The next part of my plan deals with that other 60 percent.
A balanced federal budget should not just be a political sound bite. As one of 49 governors operating with balanced budget requirements, I balanced every budget in my two terms as governor of Minnesota. I know the only reason the Minnesota legislature ever gave me a balanced budget was because, under Minnesota's Constitution, it had to.
That's why I support a constitutional amendment that not only requires a balanced federal budget, but also caps federal spending as a percentage of our economy, around 18 percent of gross domestic product.
But passing a constitutional amendment will take awhile. The crisis that we face requires immediate action. That's why I have proposed capping and block-granting Medicaid to the states, raising the Social Security retirement age for the next generation and slowing the rate of growth in defense spending.
I will also call for Congress to grant the president the temporary and extraordinary authority to freeze spending at current levels, and impound up to 5 percent of federal spending until the budget is balanced.
Hewitt: "Pawlenty's Core Message Ought To Be Adopted By Every GOP Candidate And Repeated By Every Advocate For Every Campaign." In a June 7 post to his blog, conservative radio host Hugh Hewitt said of Pawlenty's economic plan as outlined in The Chicago Tribune: "It is an excellent piece, emphasizing as it does the need for economic growth ...The pro-growth agenda contrasts sharply with the agenda of ever-increasing, creeping state control and higher taxes pushed by President Obama. Pawlenty's core message ought to be adopted by every GOP candidate and repeated by every advocate for every campaign." [Hugh Hewitt, 6/7/11]
Fox Nation: "Pawlenty Outlines Bold Reaganesque Supply-Side Tax Cut Plan." In a June 8 post to Fox Nation, a headline linking to a Washington Post article about Pawlenty's speech read, "Pawlenty Outlines Bold Reaganesque Supply-Side Tax Cut Plan." [Fox Nation, 6/8/11]But Experts, Economists Say Pawlenty's Plan Is "A Joke"
Holtz-Eakin: "Growth Rate Is Not Going To Be 5%...The Market Just Doesn't Support That." In a statement to Talking Points Memo, Douglas Holtz-Eakin, former Congressional Budget Office (CBO) director under George W. Bush, said of Pawlenty's plan:
"The trend growth rate is not going to be 5% in the United States," Douglas Holtz-Eakin, director of the CBO under President Bush and a top GOP advisor, told TPM. "The market just doesn't support that. It just doesn't." [Talking Points Memo, 6/8/11]
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