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368 Economists Including Nobel laureates against Kerry economic plan
National Review ^

Posted on 10/13/2004 3:21:24 PM PDT by NoobRep

October 13, 2004, 11:05 a.m. 368 Economists Against Kerrynomics The challenger’s policies would bring “a lower standard of living for the American people.”

By J. Edward Carter & Cesar V. Conda

Leading economists have a message for America: “John Kerry favors economic policies that, if implemented, would lead to bigger and more intrusive government and a lower standard of living for the American people.”

That was the conclusion released in a statement Wednesday by 368 economists, including six Nobel laureates: Gary Becker, James Buchanan, Milton Friedman, Robert Lucas, Robert Mundell, and — the winner of this year’s Nobel Prize in Economics — Edward C. Prescott. The economists warned that Sen. Kerry’s policies “would, over time, inhibit capital formation, depress productivity growth, and make the United States less competitive internationally. The end result would be lower U.S. employment and real wage growth.”

Consider Kerry’s spending and tax proposals. Kerry claims he wants to balance the federal budget, but as the Washington Post pointed out last August, “Sen. John F. Kerry’s pledge to reduce record federal budget deficits is colliding with an obstacle that may be growing higher by the week: his own campaign commitments.” In fact, Kerry’s spending proposals would add an estimated $226 billion annually to federal spending. To put this in perspective, $226 billion is roughly equal to the gross domestic products of Greece or Sweden.

Kerry’s oft-repeated budget solution is to raise taxes on “families making over $200,000 on income earned above $200,000 to their levels under President Clinton.” This proposal would generate hundreds-of-billions of dollars over the next decade for the Treasury’s coffers. Kerry’s other proposed tax increases would generate billions more. Yet, these tax increases would offset only a fraction of Kerry’s new spending.

For instance, Senator Kerry’s government-run health insurance spending plan would by itself require a tax increase of more than $1 trillion. Two independent studies, one by the Lewin Group and another by the American Enterprise Institute, concluded that Kerry’s health insurance proposal would cost more than $1 trillion over the next 10 years. And that’s just one of Kerry’s spending proposals. To close the funding gap between all of his spending and tax promises, Kerry would have to raise taxes by an average of $1,431 for everyone who files an income-tax return.

The stark disconnect between Kerry’s spending and tax proposals is what prompted 368 leading economists to conclude, “Kerry’s stated desire to balance the budget and to boost federal spending substantially would almost certainly require far higher and broader tax increases than he has proposed.” And given Kerry’s voting record in the Senate — he has cast 98 votes for tax increases totaling more than $2.3 trillion throughout his legislative career — that is no idle threat.

It is no secret that John Kerry wants America’s foreign policy to be more like that of Germany and France. But perhaps even more disturbing, he has demonstrated that he wants to emulate their failed tax-and-spend economic policies, too. Over time, the consequences could be devastating. Consider the impact those policies have had on Europe. Germany and France once enjoyed standards of living comparable to those of the United States. Today, U.S. per capita GDP is 38 percent higher than that of Germany and 43 percent higher than that of France. Indeed, as economist Bruce Bartlett recently pointed out, “On average, Europeans only live about as well as those in the poorest American state, Mississippi.”

The 368 economists only briefly touched upon Kerry’s trade policies. As it happens, there is not much upon which to comment. Kerry has expressed a general reluctance to reduce trade barriers, and he has promised, if elected, to “review existing trade agreements.” His applause line is that he vows not to “sign any new trade agreements until the review is complete and its recommendations [are] put in place.” According to the 368 economists, “That's a prescription for political gridlock. Given the widespread benefits of unfettered trade, Kerry’s trade policies would harm U.S. producers and consumers alike.”

Finally, we have all heard John Kerry denigrate the present rate of job creation. Yet, according to latest Bureau of Labor Statistics employment report, 1.9 million jobs have been created since August 2003. And at 5.4 percent, the unemployment rate is below the average unemployment rates of the 1970s, 1980s, and 1990s.

We have also heard Kerry’s solemn vow to create 10 million new jobs during his first term as president. But you probably have not heard that the U.S. economy is likely to create about that many jobs over the next four years under current policy.

During the first nine months of 2004 — while Kerry was criticizing the pace of employment growth — payroll employment grew an average of more than 170,000 jobs a month. At that rate, the next administration would preside over the creation of roughly 8.2 million net new jobs. And yet, as Martin Sullivan pointed out in Tax Notes, Kerry has not presented one objective analysis to support his claim that his policies would create 1 million more jobs, much less 10 million more.

John Kerry has adopted the Walter Mondale approach to economics — increase taxes. Even advocates of Keynesian economics would not recommend raising taxes in the early stages of an economic recovery. Unlike Mondale, however, Kerry will wait until after the election to reveal all of the tax increases that will be required to pay for his government spending promises. Three hundred and sixty eight economists hope American voters will heed their warnings before it is too late.

— J. Edward Carter is an economist in Washington, D.C. Cesar V. Conda, formerly assistant for domestic policy to Vice President Dick Cheney, is a senior fellow at FreedomWorks in Washington, D.C.

TOPICS: Business/Economy; News/Current Events; Politics/Elections
KEYWORDS: economics; faxthistocarlrove; issues; kerry; kerryeconomics; nobel
Why can't Bush just hammer Kerry with this article tonight?
1 posted on 10/13/2004 3:21:25 PM PDT by NoobRep
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To: NoobRep
Why is this man smiling?
"Hi there John!"
2 posted on 10/13/2004 3:26:08 PM PDT by BenLurkin (We have low inflation and and low unemployment.)
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To: NoobRep

Great Article. I hope Bush can let Kerry have it with the "facts" presented here. I also heard, I think the same article, mentioned by Rush (Roger) today.

3 posted on 10/13/2004 3:27:41 PM PDT by bobsunshine
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To: BenLurkin


4 posted on 10/13/2004 3:31:22 PM PDT by Pajama Blogger Reader (Yeah, Kerry...tell us another one)
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To: NoobRep
GW, "Mr. Kerry you always say you will draw together the best minds on any particular subject. I can give you 368 reasons why your economic plan won't be good for America."
5 posted on 10/13/2004 3:45:40 PM PDT by badpacifist (neener neener neener)
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To: NoobRep

A president needs Congress to pass spending bills. A Republican Congress would NEVER pass what Kerry proposes. No one is going to be overly concerned about the economy when the see the resurrection of communism in the Soviet Union and the acquisition of Tawain by China while Kerry is president. Communism will again be on the march. Be afraid, be very afraid, but act, now.

6 posted on 10/13/2004 4:00:20 PM PDT by HankReardon
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To: NoobRep

368 bump

7 posted on 10/13/2004 4:21:26 PM PDT by satchmodog9 (Murder and weather are our only news)
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To: NoobRep; Dog Gone; Grampa Dave; BOBTHENAILER
8 posted on 10/13/2004 4:29:35 PM PDT by SierraWasp (John "Fonda" Kerry... Leftist, Elitist, Defeatist!!!)
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To: NoobRep

A Milton Friedman BUMP!!!

9 posted on 10/13/2004 4:31:15 PM PDT by SierraWasp (John "Fonda" Kerry... Leftist, Elitist, Defeatist!!!)
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To: NoobRep; dalereed; NormsRevenge; tubebender; hedgetrimmer; forester; Carry_Okie; farmfriend; ...
"Three hundred and sixty eight economists hope American voters will heed their warnings before it is too late."

A hang onto your wallet... BUMP TO THE TOP!!!

10 posted on 10/13/2004 4:34:55 PM PDT by SierraWasp (John "Fonda" Kerry... Leftist, Elitist, Defeatist!!!)
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To: NoobRep

This is a bit like the Swift Vets. There are 250+ against Kerry, and 15 for Kerry.

There are 368 Economists against Kerry, and 10 for Kerry.

There are 250 Generals for Bush, and 15 for Kerry.

11 posted on 10/13/2004 4:39:02 PM PDT by igoramus987
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To: bobsunshine
"let Kerry have it with the "facts" presented here"

Sorta reminds me of an O'Reilly show from probably a year or more ago when he had on a real tax-and-spend type.

Bill intimated that he paid near 51% in taxes and asked what the t-a-s guy thought would be fair.

Guy responded (withour batting an eyelash) that 70% would not be out of line! O'Reilly was stunned and answered with "70%? With that, I'd have to lay off at least two of my staffers."

Speaketh volumes about tax cuts/increases and employment does it not?

Just MHO, of course.

12 posted on 10/13/2004 5:48:03 PM PDT by theoldChief (Pacifists are the parasites of freedom)
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To: NoobRep

No wonder Europeans support Kerry, he would help them gain more of a comparative advantage over the US, sinking our economy down to their level.

13 posted on 10/13/2004 5:57:33 PM PDT by eagle11 (John Kerry - the WRONG candidate in the WRONG country.)
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