Dan Mitchell, an economist and senior fellow at the Cato Institute, told Newsmax TV that President Donald Trump has the right ideas about cutting taxes and regulation, while government spending is worrisome.
“If we want faster growth, the only recipe that gives you faster growth in the long run is increasing the productivity, the efficiency of your economy: Getting more output from your capital and labor,” he told Sunday’s “The Income Generation Show.”
“Let's lower the corporate tax rate, let's reduce some red tape and regulation in the economy and Trump's been pretty good about those things,” he said, “but for heaven's sake, if he doesn't get serious about government spending, I worry that any tax cuts we get won't be very sustainable.”
U.S. Treasury Secretary Steven Mnuchin said economic growth of 3 percent is achievable in the next two years as the Trump administration seeks tax cuts to create more incentives to work and invest. The U.S. economy has grown by 3.2 percent a year on average since 1947, but never exceeded 3 percent during the Obama administration.
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Mitchell said it’s important to recognize that the private sector is more efficient at allocating resources, and that drives economic growth more than government spending does. The mainstream media tend to portray the U.S. economy as static, so that tax cuts only shift money from public to private hands without boosting output.
“A lot of the establishment media does lean left and you see that on the types of issues I work on,” Mitchell said. “They always talk about the cost of a tax cut as if the money you earn belongs to the government and if you get to keep more of it somehow that's a cost to the economy.”
“They think: let's take money out of the economy's right pocket, put it into the economy's left pocket and pretend we have more money,” Mitchell said. “It didn't work for Bush. It didn't work for Obama. It didn’t work for Hoover. It didn't work for Roosevelt. It hasn't worked for Japan.”
"The Income Generation" airs on Newsmax TV every Sunday at 10 am ET.
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