A former economic adviser in the George W. Bush administration wants to place a bet with two liberal economists over the GOP tax plan.
Larry Lindsey is challenging Paul Krugman and Larry Summers to put their money behind their recent criticisms of Kevin Hassett, chairman of the Council of Economic Advisers, who has said the plan would benefit workers and increase economic growth.
In a note to clients, Lindsey says he is betting on Hassett and believes in the kick the tax reform plan can have on the economy if passed. Lindsey, like Hassett a Republican, characterized recent comments made by liberals Krugman and Summers as "economic name-calling." Hassett has recently been engaged in a war of words with the left-leaning Tax Policy Center.
Krugman recently called Hassett's corporate tax analysis "boneheaded," and 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." He then 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," Lindsey wrote. "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."
Summers and Krugman did not immediately respond to a CNBC request for comment.