This year, the media has been focused largely on the election process — campaign managers, speaking styles, every slip and misstep. That’s been entertaining, but the policy differences between the two sides are much more important, and the most crucial difference may be over economic policy.
Donald J. Trump has campaigned very clearly for change — a policy upheaval to promote faster growth, repair the economic stagnation and end the corrupt pay-to-play system that favors the well heeled. Hillary Clintonhas pledged to extend and build on the policies of the Obama administration.
There is no doubt who has the better plan. Our economy is growing at only 1.1 percent per year, a fraction of our average rate, and the Congressional Budget Office forecasts just 2 percent annual growth (in inflation-adjusted gross domestic product) for the next 10 years.
Yes, we went through a deep recession, but it ended in 2009. The recovery has been the weakest in decades, and the first that has actually pushed median incomes down. Business investment and profits are lower now than a year ago. Counterproductive federal policies squash small businesses with inane regulatory sprawl that affects hiring, taxes, credit and medical care.
The result is a stagnant economy that leaves out millions of Americans who would like to work and get ahead, and a devastating report card on the Obama White House.
To restart growth, Mr. Trump would immediately lower tax rates, including for middle-income voters, and simplify the tax code. Americans would be able to exempt average child-care expenses from taxes, and Mr. Trump’s administration would eliminate the death tax, which falls especially hard on some small businesses and farmers.
To help create a flood of new business investment and jobs, the Trump plan would reduce corporate tax rates to 15 percent while eliminating or capping many tax deductions. This would simplify the tax system, making us much more competitive with countries and a magnet for new jobs.
Mrs. Clinton wants to go in the opposite direction, depressing job growth with an uncompetitive corporate tax rate, higher taxes on estates and short-term capital gains, and a 4 percent surtax on the most successful individuals.
She insists that the Trump plan will cause a bigger deficit and a recession, but she is basing that on her party’s view that tax rates don’t matter much to growth and investment; Mr. Trump knows they do. The Moody’s study Mrs. Clinton cites so often says Mr. Trump’s plan would cause higher fiscal deficits but would also create faster growth and a surge in new jobs. It assumes that the Fed would raise interest rates to over 6 percent, causing a recession it attributes to Mr. Trump. A much more likely outcome is faster growth without the spike in interest rates or a recession.
Mr. Trump agrees with those who are concerned about the national debt. He wants to help the private sector to grow faster and to create a debt limit that would rein in our debt-to-G.D.P. ratio, which has skyrocketed under President Obama.
Critics of tax cuts say the government can’t afford his plan. But what the economy can’t afford is the current inept tax system, slow growth and Mrs. Clinton’s $1.1 trillion in tax hikes.
Mr. Trump would immediately halt the crush of new federal regulations on business. In 2015 alone, the Obama administration unilaterally issued more than 2,000 new regulations — hidden taxes that add a lead weight on our businesses. To grow faster, the economy has to have relief from this central planning and regulatory overreach. And Mr. Trump would seek consumer choice in education and health care and a repeal of Obamacare.
The scant economic gains in the past eight years are even weaker for most Americans than the G.D.P. data indicates because federal policy favored gains for the haves, not the have-nots. Your prosperity is increasing if you work in finance, issuing bonds or trading currencies, or you lobby or arrange government contracts. If not, you’ve most likely gone backward financially.
Mr. Trump is proposing to overturn that stagnant, corrupt system. An important part of his transformation is a new trade policy that encourages American jobs rather than undercuts them. His position has been demonized by the press as protectionism, but the reality is that our trade system is broken. Bad deals harmed American workers and gave access to United States markets without achieving vital conditions like intellectual property protection in China.
The North American Free Trade Agreement, for example, grew to 1,700 pages, yet still allowed Mexico to enforce its value-added tax on American products while exporting goods to the United States duty-free. The even more complicated Trans-Pacific Partnership would allow foreign companies to challenge United States laws in an international court, but it would do nothing to guarantee that countries couldn’t use currency manipulation to benefit their exporters over ours.
Voters will have an opportunity to decide for or against a government that’s failing on health care, taxes, trade, cost control and regulation. One candidate wants higher tax rates. The other would lower them. One candidate thinks the economic recovery has been successful whereas the other thinks it left millions of Americans out. One candidate has spent her lifetime seeking the presidency. Mr. Trump hasn’t.
As Thomas Jefferson said, “A little rebellion now and then is a good thing, and as necessary in the political world as storms in the physical.” It’s time for one now.
Tags: a new trade policy that encourages American jobs rather than undercuts them, Donald Trump, economic policy, Economy Needs Donald Trump, federal policy favored gains for the haves -- not the have-nots, fiscal deficits, G.D.P. data, going backward financially, Hillary Clinton, IRS, NAFTA, national debt, new jobs, North American Free Trade Agreement, Obama administration regulations, Taxes, TPP, Trans-Pacific Partnership, Trump, U.S. economy, Value Added Tax