Fact-checking the economic claims in Donald Trump’s convention speech
Fact-checking the economic claims in Donald Trump’s convention speech
Donald Trump accepted the Republican presidential nomination Thursday night with a 92-minute speech — the longest convention speech in history, according to Reuters.
He mentioned inflation 14 times and jobs 13 times along with a lot of economic claims and promises. Alan Rappeport, economic policy reporter with The New York Times, spoke with “Marketplace Morning Report” host Sabri Ben-Achour to examine some of those claims. Below is an edited transcript of their conversation.
Sabri Ben-Achour: So I’m curious, just through an economic lens, what your main takeaway from Trump’s speech was.
Alan Rappeport: I thought it was very interesting. I thought, you know, it hit on a lot of the populist themes that he’s known for. It also attacked President [Joe] Biden on inflation and the state of his economy. And it made a lot of big promises. As we saw during his first term, a lot of the things that he said would come true didn’t necessarily happen. Campaign promises are to be expected during a nomination convention like this, and he made some very big ones.
Ben-Achour: Let’s start with inflation. Here’s former President Trump:
Trump: I will end the devastating inflation crisis, immediately bring down interest rates and lower the cost of energy. We will drill, baby, drill.
Ben-Achour: Bringing down interest rates and ending inflation. That is an oxymoron, is it not?
Rappeport: In theory, bringing down interest rates could reignite inflation, especially if it happens too quickly. I think he was maybe saying that all these things are going to happen. And it sounded like he was talking about increasing energy production and reducing energy prices as sort of this silver bullet that was going to fix all the problems that the U.S. economy has been dealing with over the last 3½ years. But I think a lot of the policies that he was talking about, sort of when thrown together, are likely to reignite inflation. Particularly a huge tax cut could ramp up consumer spending.
Ben-Achour: Yeah. On that silver bullet of reducing energy prices, I mean, how long would it take to bring more oil to market in a way that would affect prices, and how many prices would that affect?
Rappeport: Well, energy prices do sort of feed through a lot of other prices that are in the consumer price index, but I think his “Drill, baby, drill” policy could take a while to actually come into effect and start reducing consumer prices. And I think he didn’t give President Biden enough credit for the fact that the U.S. is now largest oil producer in the world at the moment. I mean, it did increase under President Trump, but President Biden has moved forward with that. It’s something that he doesn’t get a lot of credit for because of his push for green energy. So I think it’s not necessarily going to be an overnight cure-all, and I do think that that was probably one of the biggest exaggerations that he made during the speech.
Ben-Achour: Let’s talk about taxes. Here’s what Mr. Trump had to say.
Trump: We’ll start paying off debt and start lowering taxes even further. We gave you the largest tax cut. We’ll do it more. You know, people don’t realize I brought taxes way down, way, way down, and yet we took in more revenues the following year than we did when the tax rate was much higher.
Ben-Achour: How do you pay off debt and lower taxes?
Rappeport: Well, the sort of Republican dream about this is that lowering taxes will cause a surge of economic growth, grow the economy, and that will lead to tax revenues to pour in as companies are hiring and workers are getting bigger paychecks, and then they’ll be paying more money to the federal government that way. In reality, his remark about 2018 I think in nominal terms, there may have been an increase in revenues that year, but it kind of belied, like, the reality of what happened, which was you adjust for inflation and for growth, revenues were not larger than they were before the Tax Cuts and Jobs Act of 2017. Also they were lower than had been expected by the Congressional Budget Office the previous year in their forecasts. Pretty much by all estimations, the Trump tax cuts in 2017 did not end up paying for themselves. The director of the Congressional Budget Office, who’s a Republican, actually said so this month at a congressional hearing.
Ben-Achour: Former President Trump also alleged that Democrats are going to destroy Social Security and Medicare. What do you think of that?
Rappeport: That’s also one of the ones during our fact checks that we said was not true. That’s been a priority of President Biden not to touch Social Security or Medicare, and it’s something that Republicans have long wanted to, you know, bring in so-called structural reforms, which are often thought of as being suggestions for cuts or for delaying the retirement age or, you know, other things that might reduce benefits for retirees over time. It is something that President Trump, you know, has promised that he actually would not touch, and I think that’s probably why he’s been saying that, you know, Democrats would do this. But the reality is that if neither party comes together to make some reforms to Social Security and Medicare, either through potentially giving it additional funding or coming up with ways to restructure it, there will be automatic benefit cuts over the next decades. So, you know, it basically, it would kind of be up to both parties to find some sort of way to make these programs solvent because an aging U.S. population is really straining the social safety net.
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