(CNN)The economic plan that Donald Trump presented on Monday in Detroit, while light on details, provides a good glimpse into what the nation can expect from a Trump presidency. Though the plan had a few noteworthy ideas, it misfired on issues ranging from tax reduction and reform to regulatory reform and trade policy.
The plan promises across-the-board tax reduction, aimed mainly at middle-class Americans. Reductions in marginal tax rates can spur economic activity, but unless the tax cuts improve the incentives to work and save, they are at best mildly beneficial in the short run and detrimental in the long run.
In particular, Trump proposes allowing parents to deduct the average cost of child care from their annual taxes. This incentivizes more children and spending -- the opposite of good reform. Policy distorts incentives when it takes a stand on the number of children or the kind of spending; it should remain neutral about these decisions.
Worse yet, Trump"s plans for trade policy are hopelessly misguided. He believes that trade kills jobs, an idea not supported by the evidence. Free trade means that all of a country"s citizens are employed in their most productive jobs and sectors, maximizing the size of the economic pie for everyone.
And Trump"s proposals on trade are particularly dangerous because some sound "reasonable" at first glance. He suggests, for example, that we impose tariffs on countries that "cheat" by subsidizing exports. Yet every country cheats in this way, including the United States. So this "sensible" departure from free trade is an excuse to impose tariffs widely, often at the urging of crony capitalists who stand to benefit.
Beyond all this, one glaring absence in Trump"s plan is any mention of entitlement spending. Every serious analysis of the U.S. fiscal situation finds that without substantial reductions in Medicare, Medicaid, Obamacare and Social Security, the United States is on a path to becoming Greece. Any plan that does not address this issue ignores the elephant in the room.
Taken as a whole, Trump"s economic plan is disastrous. Large tax cuts without even larger spending reductions mean explosive deficits and debt. Massive interference with free trade means a far less productive economy. The few sensible elements -- tax reform and regulatory reform -- cannot plausibly undo the damage of the other proposals.
Read more: <a href="http://www.cnn.com/2016/08/08/opinions/trump-economic-policy-miron/index.html">http://edition.cnn.com/</a>
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