New Perry ad: "Creating jobs"

Rick Perry has decided to focus on job creation in his new ad, a 30-second TV spot that will get hefty play in Iowa, where polling shows him deep in the second tier at the moment. Matt Lewis has the script for the ad, which highlights Perry’s best narrative as a public-sector executive that knows how to shape a political environment for explosive job creation:

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It’s an effective ad, concise while covering the broad strokes of Perry’s economic platform. In fact, it’s so good that it prompts the question of why Perry didn’t start off his campaign running ads like these and sticking to this narrative, rather than go negative so early against Mitt Romney.

One ad on its own won’t turn things around for Perry, but a comprehensive economic plan may well do so. So far, Perry’s plan has won praise from the Wall Street Journal, although not unqualified support:

The Texas Governor would address the inevitable political attack that this would be “regressive” by allowing a $12,500 standard deduction per individual. This means that a family of four would pay no federal income tax until it earns $50,000 a year. This is a very generous exemption, and the Perry campaign couldn’t say what share of taxpayers would pay nothing at all. But it would be tens of millions, which reduces the tax base.

The standard deduction would also begin to phase out at $500,000 of income, which guarantees a higher effective tax rate for higher income taxpayers. This won’t be enough to satisfy the liberals at the Tax Policy Center that is portrayed by the media as “nonpartisan,” but Mr. Perry is sure trying.

Less defensible on equity grounds is Mr. Perry’s proposal to include deductions for mortgage interest, charitable contributions and state and local taxes even in his optional flat tax. This is intended to blunt political criticism from powerful lobbies that like their current breaks. …

All of this is bold enough that it will require an informed and articulate promoter, and the question about Mr. Perry is whether he can make that case better than he has so far been able to defend his Texas record. He’ll be helped by Steve Forbes, the original flat-tax proponent, who is now advising Mr. Perry and knows the attacks to come.

The good news is that Mr. Perry and most of his competitors are thinking big, with proposals that will reverse the U.S. slide to high-debt, slow-growth stagnation. President Obama wants to portray the economic debate as pro-growth government spenders vs. the austerity of budget cutting. But the real debate is over whether government or the private economy is the main engine of prosperity. The flat tax puts Republicans on the side of private growth and government reform, a potent combination. Perhaps Mr. Perry and his comrades can even coax Mitt Romney to join the party.

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The WSJ notes that the proposal probably won’t raise as much money in static analysis as the current system, but also points out that Perry wants to cut spending back to 18% of GDP, which this tax system should be able to raise.  In two posts for AEI, economist Jim Pethokoukis runs the numbers both statically and dynamically, and comes to the conclusion that Perry’s plan could unlock explosive economic growth — which would solve the problem anyway:

2.  Under dynamic scoring, the Perry tax Plan (call it PTP-DS) would raise $1.7 trillion less than the unrealistic CBO baseline. But revenue would move above 19 percent — a historically high number — of GDP in 2019 and 2020.

3.  Under PTP-DS, the U.S. economy would be $3.5 trillion bigger in 2020 than under the CBO baseline forecast. And this gap would widen since CBO has some pretty sluggish growth forecasting moving forward. …

Bottom line: If a President Perry could balance the federal budget by 2020 and cap spending at 18 percent of GDP — and if you buy the JDA analysis — the result would be a more financially stable America and a richer America than the current economic and budgetary trajectory would indicate.

The WSJ’s point on the ability of Perry to sell this coherently still remains, however.  This is a comprehensive plan with lots of moving parts and complications, one that will have to stand up to a series of models, not all of which will be entirely favorable.  Perry’s earlier debate failures and his strange decision to spend time talking about Mitt Romney’s book rather than his own record doesn’t build a lot of confidence in his ability to defend this plan in detail, but we’ll see in the next few debates if Perry can turn that around.  If Perry can’t sell this plan himself, perhaps another Republican can pick up the standard and sell it in his stead in a general election, or something similar to it — like Newt Gingrich’s plan.

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