Two Liars

Donald Trump Says His Tax Cut Will Lead to 6% GDP Growth and President Obama Says TPP Will Boost Growth

Dean Baker, Center for Economic Policy Research

Published: 05 October 2015

The most favorable positive assessment comes from the Peterson Institute. It projects that the agreement would boost growth by 0.03 percentage points annually over the next dozen years. This would mean, for example, that if growth would have been 2.2 percent without the TPP, it would be 2.23 percent with the TPP. Other projections have been lower. For example, an analysis by the United States Department of Agriculture concluded that the gains would be too small to measure.

It is also worth noting that none of these studies took into account the negative impact on growth from the higher drug prices that would be the result of the stronger protectionist measures in the TPP. The United States currently spends more than $400 billion a year on prescription drugs. This amount will almost certainly increase in both the U.S. and elsewhere as a result of stronger patent and related protections in the TPP. Higher drug prices will pull money out of people’s pockets, leaving less to spend in other areas, thereby slowing growth.