Former US Federal Reserve chairman Ben Bernanke on Monday cast doubt on US President Donald Trump’s promise to expand the economy by 3 percent to create jobs and room for tax cuts.
“On a sustained basis, it’s certainly possible, but probably not that likely,” Bernanke said during an appearance on CNBC.
US Secretary of the Treasury Steven Mnuchin, also on CNBC, reaffirmed the administration’s view that slashing taxes and regulation would fuel growth of 3 percent or higher, repeating pledges he made last week when he unveiled a multitrillion-dollar tax cut plan.
However, economists have said there is scant evidence that tax cuts pay for themselves by generating growth.
The White House Web site continues to tout Trump’s campaign promise of 4 percent growth.
Bernanke acknowledged tax cuts could lead to faster growth in the short term.
“I think if there’s a big tax cut, for example, that lowers tax rates, you might have a bump because of the increased demand, increased consumer spending,” he said.
However, he said he doubted that could lead to longer-term growth.
“Probably not,” he said. “I would take the under on that.”
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