October 15, 2004

A Group of 368 Economists Releases a Statement Opposing Kerry

368 economists from 44 states have made a statement exposing the dangerous mistakes included in Kerry’s economic proposals. The economists include six Nobel prize winners.

Economists’ Statement On John Kerry’s Economic Agenda

To whom it may concern:

We, the undersigned, strongly oppose key aspects of the economic agenda that John Kerry has offered in his bid for the U.S. presidency.

John Kerry says he “is committed to balancing the budget,” but he has proposed additional spending that some analysts have estimated could cost as much as $226.1 billion annually ($2.261 trillion over ten years). He promises to “end corporate welfare as we know it” by implementing the “McCain-Kerry commission on corporate welfare,” but he also proposes to provide additional “tax credits and subsidies to manufacturers” that meet his criteria.

Entitlement reform is the most important fiscal challenge facing the country, yet Kerry’s approach has been to deny that any fix is needed. Indeed, Kerry criticized the recent Medicare expansion for not being large enough.

John Kerry has proposed tax increases that threaten to sap the economy’s vitality and reduce long-term growth. Specifically, Kerry proposes to “restore the top two [income] tax rates to their levels under President Clinton.” He would also, among other things, “restore the capital gains and dividend rates for families making over $200,000 on income earned above $200,000 to their levels under President Clinton.” 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.

John Kerry boasts that his economic policies will lead to the creation of 10 million jobs in his first term as president. As Martin Sullivan wrote last April in the strictly non-partisan Tax Notes, no one “has presented any analysis to relate the Kerry plan to the creation of 1 million jobs, much less 10 million jobs.” In fact, we believe Kerry’s proposals 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.

John Kerry has expressed a general reluctance to reduce trade barriers. He has promised, if elected, to “review existing trade agreements.” He vows not to “sign any new trade agreements until the review is complete and its recommendations [are] put in place.” 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.

All in all, 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.

So much for Kerry and his vaunted economic policy proposals. When six Nobel prize-winning economists plus over 360 of their peers say a plan is a disaster, that’s hard to dispute.