Just a few days after the Bureau of Labor Statistics announced that the US economy had produced more than a quarter of a million new jobs in July, Republican presidential nominee Donald Trump took to a podium before the Detroit Economic Club to describe an America in economic and social decline, run by out of touch elites who are actively deceiving the public.
The national unemployment statistics reported by BLS, which currently show the official unemployment rate at 4.9 percent are, Trump said, “one of the biggest hoaxes in modern politics.”
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The political system, he said, is “rigged and corrupt.” His Democratic opponent, Hillary Clinton, “is bought, controlled and paid-for by her donors and special interests.” The speech was interrupted by protesters at least a dozen times, but aside from a few throwaway comments, Trump did not engage with them.
Instead, he got busy announcing what amounts to a complete overhaul of the tax plan that he released to great fanfare earlier this year (and which has since been removed from his campaign website.) The original plan, which promised massive tax cuts with little or no offsetting spending cuts, would have added an extraordinary $11.5 trillion to the national debt, and was dramatically tilted toward the very wealthy.
The new plan scales back the cuts. Instead of three tax brackets of 10, 20, and 25 percent, he is now proposing a plan with brackets of 12, 25, and 33 percent -- the same system proposed by Republicans in the House of Representatives.
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Trump’s plan would also slash the top US corporate tax rate by more than half, from 35 percent to 15 percent or lower. The plan would greatly increase the deductibility of childcare expenses, “allowing parents to fully deduct the average cost of childcare spending from their taxes.”
While it was thin on details, the new version of the Trump tax plan would add only about $3 trillion to the national debt over 10 years, according to the Committee for a Responsible Federal Budget.
“This certainly appears to be an improvement over Trump’s previous $11.5 trillion agenda, but we can’t afford to add even a few trillion dollars to the debt – not with our debt already at record-high levels and projected to grow by $10 trillion over the next decade under current law,” said CRFB president Maya MacGuineas.
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“We urge Donald Trump to put forward a tax framework that will cost as little as possible – or preferably generate net revenue – along with a serious suite of new spending cuts and entitlement reforms that would not only pay for any remaining tax cuts but also put the national debt on a downward path relative to the economy,” MacGuineas added.
Trump also repeated his assertion that the US needs to renegotiate or even abandon international trade agreements -- particularly large multilateral ones.
“Trade has big benefits, and I am in favor of trade,” he said. “But I want great trade deals for our country that create more jobs and higher wages for American workers. Isolation is not an option, only great and well-crafted trade deals are.”
Trump didn’t break much new ground on the trade issue in Detroit, but he did earn some scathing responses from well-known economists, including Justin Wolfers of the University of Michigan and the Brookings Institution.
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Trump claims trade is a problem we've made bad deals. No-one who knows anything agrees: https://t.co/PZJnh3vQMR pic.twitter.com/yHMBDIoFLq— Justin Wolfers (@JustinWolfers) August 8, 2016
Trump gave the broad strokes of his economic plan and promised to deliver detailed proposals at some indeterminate date in the future:
“In the coming weeks, we will be offering more detail on all of these policies,” he said early in his remarks. “We will also be rolling out proposals to increase choice and reduce cost in childcare, offering much-needed relief to American families. I will unveil my plan on this in the coming weeks.”
“Without security, there can be no prosperity. We must have law and order. In the coming days, we will be rolling out plans on all of these items.”
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The speech Monday was widely seen as part of an effort by the Trump campaign to halt a dramatic slide in both his poll numbers and his approval ratings.
Whether a turn to policy discussions will help Trump engineer a recovery is unclear, but there is no question at all that his is a campaign in need of urgent change. That was underscored by the announcement, during Trump’s remarks, that the latest national poll from Monmouth University has Clinton leading by a significant 46 percent to 34 percent margin.