Donald Trump is no supply-sider, as is evidenced by his pro-tariff and restrictionist immigration stands. Supply-side, from its inception, is all about job growth and equitable prosperity. Both would be hurt by such autarkical prescriptions. Trump doesn’t get it.
His tax plan, while superficially supply-side in that it lowers rates somewhat, carries a heavier burden of proof than it has received from some veteran supply-siders. The mulligan given Trump is a tribute to the ever-sunny disposition and native optimism of most supply-siders. Trump and his tax reform plan drew mixed reviews even on the supply side from such thoughts leaders as Forbes.com’s own John Tamny, recently, in Did Republican Partisans Actually Read Trump’s Tax Plan.
The two kindest, and most astute, points noted in favor of the plan were made by Tamny, “Trump’s decision to not support the subsidization of capital investment is correct,” and by supply-sider Jeff Bell writing in APP’s ThePulse2016.com (whose sister organization I professionally advise) who observed “Unlike most recent Republican plans, Trump avoids single year expensing for corporate investment in new physical capital (machines and buildings). Though rarely highlighted by its advocates, it is so expensive it preempts the ability to cut personal rates very much, without huge projected deficits.”
Supply-side economics in its iconic Jack Kemp form is all about job creation and rising worker affluence. It’s fine if the rich get richer as long as the rest of us get richer too. That’s the American Dream. Trump’s version doesn’t offer that.
Supply-side is not about deficits. In a most exquisite of ironies, deficit-mongering neo-Keynesians (among others) defamed supply-side as, well, deficit-mongering. Supply-side was, and is, about balancing the budget through creating a larger private sector economic base, rather than by tax, especially tax rate, increases.
Trump’s plan threatens to blow out the federal debt from its current $18T by something like an additional $10T. This is antithetical so supply-side economics. And, while we’re at it: Tea Party Patriots? Call your office.
Ralph Benko, internationally published weekly columnist, co-author of The 21st Century Gold Standard, lead co-editor of the Gerald Malsbary translation from Latin to English of Copernicus’s Essay on Money, is American Principles Project’s Senior Advisor, Economics.