Republican tax plans don't add up

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According to Cruz, lower tax rates will spur economic growth because of stronger incentives to work and save. 

This is actually pretty funny. One of the reasons the world economy is experiencing problems is because there is a savings glut, that is, desired savings exceed desired investment by a fairly wide margin.

This is why interest rates are so low, and there is hardly any inflation. The way increased saving is supposed to spur economic growth is by lowering interest rates, which would spur investment. 

But interest rates are already rock bottom in most of the developed world, and investment isn't actually very interest rate sensitive anyway.

Even more funny, when central banks try to do the same, they get denounced by market fundamentalists as irresponsible debasers of the currency, producing even open letters to the Fed denouncing them.

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Trump’s tax cut proposals would drain the Treasury of $9.5 trillion over the coming ten years, while Cruz’s 10 percent flat tax approach would reduce revenues by $8.7 trillion over the same period, according to Urban Institute-Brookings Tax Policy Center estimates. What that means is that by 2026, federal revenues would constitute just 14.1 percent of gross domestic product under Trump’s approach and 14.7 percent under Cruz’s tax cut plan – both well below the projected revenues of 18.2 percent of GDP for that year, according to a newly released study by the liberal-leaning Center on Budget and Policy Priorities. The government essentially would be operating with roughly $1 trillion a year less in revenues by that point than it would collect under current law. At the same time, overall spending would dip far below the 23.1 percent of GDP currently projected for 2026.

Trump and Cruz Tax Plans Would Require Massive Cuts in Federal Spending - Yahoo Finance

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And those growth miracles they promise..

Ted Cruz is predicting historic growth for the U.S. economy if he's in the White House. For the past several years, America's economy has grown around 2% a year. Cruz said Friday that he can get the economy expanding at 5% or more a year. That hasn't happened since 1984. The U.S. will have "a minimum of 5% GDP growth," Cruz said on CNBC's Squawk Box. Gross Domestic Product, or GDP, is the measure of all the economy activity in a country. How can Cruz achieve what so many presidents -- Republican and Democrat -- haven't been able to do in the past 30 years? Cruz says it's about going back to Reagan style economics: cut taxes, scale back regulation on business and repeal Obamacare.

Ted Cruz vows 5% economic growth - Apr. 15, 2016

The combination of tax cuts and deregulation, embarked upon since the early 1980s, what did it produce? 

Economic growth has been markedly slower in the neoliberal era (since 1980 in Britain and the US) than it was in the preceding decades; but not for the very rich. Inequality in the distribution of both income and wealth, after 60 years of decline, rose rapidly in this era, due to the smashing of trade unions, tax reductions, rising rents, privatisation and deregulation.

Freedom from trade unions and collective bargaining means the freedom to suppress wages. Freedom from regulation means the freedom to poison rivers, endanger workers, charge iniquitous rates of interest and design exotic financial instruments. Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty.

Neoliberalism the source of many problems

Since 1980, U.S. investment as a percentage of GDP was sliced in half, from nearly 24 percent to 12 percent, leaving the United States 174th in the world. The result was a dearth of real value added products and productivity. Wasn't there supposed to have been a supply-side revolution, produced by lower taxes and rising inequality (more money and incentives for 'job creators')? Apparently not, at least not so far, and there is little to assume this will change any time soon. Rising inequality is the root problem.

There Has Not Been Any Supply-Side Revolution | Seeking Alpha

And abolishing Obamacare, what will that achieve?

• Return of discrimination on the basis of existing conditions
  
• Millions more uninsured
  
• People again not starting their own companies or changing jobs out of fear losing medical coverage
  

Well, you might say, what about the Republican alternative? Hahaha, what alternative

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From the party that is supposedly worried about the public debt.. (from econbrowser)

“I am the king of debt. I do love debt. I love debt.” -Donald J. Trump, May 2016 (WaPo)

The Committee for a Responsible Federal Budget has released its score of the Presidential candidates’ plans. Here is the trajectory of Federal debt under the two plans.
[img=625x0]http://econbrowser.com/wp-content/uploads/2016/07/Debt-under-candidates-proposals-1024x562.jpg[/img]
Full report here.