Must-Read: John Cassidy: Jeb Bush and the Return of Voodoo Economics

**Must-Read:** Once again, if these GDP elasticities claimed by Cogan, Feldstein, Hubbard, and Warsh had much purchase in reality, we would have seen it in the macro performance: we would have seen a growth acceleration relative to the trend in the Reaganite 1980s, a growth deceleration relative to the trend in the Clintonite 1990s, another growth acceleration in the Bushit 2000s, and another growth decelleration now. That pattern is not what we have seen. And it would take an incredibly perverse act of Providence to produce additional masking fluctuations that give rise to the pattern we have seen:

**John Cassidy**: [Jeb Bush and the Return of Voodoo Economics]( “[Would] the [Republican] Party… endorse… narrowly targeted… [tax cuts for] middle-income families…

>…what Marco Rubio and some others are recommending, or whether it would revert to the old Reaganite model of broad cuts… for virtually everyone, but especially the rich–and to heck with the deficit. Now we know part of the answer…. Jeb Bush… tax cuts would cost about $3.4 trillion over ten years… two per cent of… G.D.P…. Wouldn’t this plan inflate the deficit… and also amount to another enormous handout to the one per cent? Not in the make-believe world of ‘voodoo economics’–the term that Jeb’s father, George H. W. Bush, used in criticizing Ronald Reagan’s tax-cutting plans during their G.O.P. primary tussle, in 1980….

>By 1988, when Poppy Bush was running for President again, more than half a decade of gaping budget deficits had discredited the most extreme and foolhardy version of voodoo economics. However, some… if pressed… insisted [that] if tax cuts were combined with… making a bonfire of government regulations, the deficit problem would go away…. Jeb Bush… claim[ed]… the trick could be accomplished by combining the tax cuts with other measures, such as allowing major corporations to repatriate… profits… stashed overseas….

>The four conservative luminaries whom the Bush campaign rounded up to advise him on this program weren’t prepared to fully endorse this argument. (They are Glenn Hubbard, of Columbia University; Martin Feldstein, of Harvard; John Cogan, of Stanford; and Kevin Warsh, of the Hoover Institution)… said that Bush’s tax plan would raise the growth rate of the economy by 0.5 per cent a year, and that the regulatory changes he is proposing would add another 0.3 per cent to the annual growth rate. But because the annual growth rate over the past five years has been 2.2 per cent, that gets us to three per cent growth, not the four per cent that Bush is promising…. As for Bush’s claim that his plan will reduce the deficit, there isn’t any real support for it in the economists’ paper, either….

>Take households that earn at least ten million dollars a year, placing them in the top 0.01 per cent of earners…. Josh Barro, of the Times, calculates that, under the Bush plan, the effective federal tax rate these households pay would be reduced from twenty-six per cent to twenty-one per cent, and they would each save about one and a half million dollars a year, on average. You won’t see that figure, or anything like it, on Bush’s Web site, of course…. That’s how voodoo economics is always marketed. But, despite the welcome addition of a few populist touches, such as pledging to euthanize the carried-interest deduction, Bush is writing the same old tired script.

September 17, 2015

Connect with us!

Explore the Equitable Growth network of experts around the country and get answers to today's most pressing questions!

Get in Touch