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Larry Lindsey Challenges 2 Liberal Economists to $60,000 Tax-Reform Bet

Image: Larry Lindsey Challenges 2 Liberal Economists to $60,000 Tax-Reform Bet
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By    |   Thursday, 12 Oct 2017 05:54 PM

Former Federal Reserve Gov. Lawrence Lindsey reportedly wants to bet liberal economists $60,000 that President Donald Trump’s tax reform will work.

Lindsey, also an adviser to George W. Bush, is urging Paul Krugman and Larry Summers to put their money behind their economic predictions, CNBC reported.

Krugman and Summers have blasted Kevin Hassett, chairman of the Council of Economic Advisers, who has said the plan would benefit workers and increase economic growth.

Krugman has called Hassett's corporate tax analysis "boneheaded."

Summers, who led the Treasury under the Clinton administration, tweeted "I no longer take CEA Chair Kevin Hassett seriously as an economic thinker...."

Lindsey, the head of the Lindsey Group and architect of tax cuts in the Bush 43 White House, told his clients in the note that if tax reform was passed, "The political and economic policy implications would be massive and far reaching," CNBC reported.

Lindsey, resident scholar for the American Enterprise Institute and president/CEO of The Lindsey Group. also made three predictions:

  • Economic growth will turn out to be far higher under Trump than under President Barack Obama;
  • Income inequality is likely to decline under Trump after having risen under Obama;
  • Real wages for ordinary workers will rise under Trump after having declined or stagnated under Obama.

"I propose a more market-oriented approach," wrote Lindsey, author of "Conspiracies of the Ruling Class."

"I am willing to bet $10,000 on each of the three points above with both Messrs. Krugman and Summers that if the Framework is passed, GDP growth will accelerate, real wages will rise, and income inequality will fall. We will report on whether we have any takers."

For his part, Trump on Wednesday told workers that they would win under his tax plan, saying it would help the middle class and boost the economy, though critics say it would mainly benefit corporations and the rich.

Speaking in an airplane hangar at a Pennsylvania Air National Guard base in Harrisburg with a trailer truck behind him, Trump reiterated the basic points of the nine-page tax cut “framework” he unveiled two weeks ago, Reuters reported.

“It’s a middle-class bill. That’s what we’re thinking of. That’s what I want,” Trump said.

“I’ve had rich friends of mine come up to me, and say, ‘Donald, you’re doing this tax plan -- we don’t want anything. ... Don’t give it to us. Give it to the middle class.’ And that’s what we’re trying so hard to do,” he said.

Financial markets have rallied strongly since Trump’s November 2016 election victory, driven partly by expectations that he would cut taxes for businesses, although policy analysts have been skeptical that he would do so.

(Newsmax wires services the Associated Press, Bloomberg and Reuters contributed to this report).

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A Bush 43-era tax-cut architect reportedly wants to bet liberal economists $60,000 that President Donald Trump's tax reform will work.Larry Lindsey, an adviser to George W. Bush, is urging Paul Krugman and Larry Summers to put their money behind their economic predictions,...
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Thursday, 12 Oct 2017 05:54 PM
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