Republican presidential candidate Tim Pawlenty speaks at the Faith and Freedom Coalition in Washington June 3, 2011. Republican White House hopefuls courted Christian conservative voters on Friday at the conference where U.S. economic concerns shared the stage with social issues that dominate the evangelical agenda. REUTERS/Joshua Roberts (UNITED STATES - Tags: POLITICS RELIGION)

Tim Pawlenty took the next step towards fleshing out his presidential candidacy Tuesday morning with a speech in Chicago laying out his economic vision for the country. His timing is felicitous: Today’s Washington Post-ABC News poll shows that President Obama gets dismal marks on his handling of the economy, on which his re-election prospects may depend.

Pawlenty’s plan, which he calls “A Better Deal,” centers around tax reform — similar to that proposed by Paul Ryan — that would close tax loopholes and lower rates on individuals and corporations. His changes would overwhelmingly benefit the wealthiest taxpayers and corporations. Pawlenty would lower the corporate tax rate from 35% to 15%, and create two new income tax brackets at 10% and 25%. He would also completely eliminate taxes on capital gains, interest income and dividends — a huge boon to wealthy investors — as well as the estate tax, which currently applies only to the most valuable fraction of estates. (MORE: Pawlenty’s Torpedo of Truth.)

In what is essentially a supply-side argument, Pawlenty simply assumes that these changes will unleash dramatic economic growth of up to a 5% annualized rate, generating enough new tax revenue to cut the deficit by 40%. The other 60%, he says, will come through spending cuts, with the help of a balanced budget amendment, a federal spending freeze, and by privatizing programs like Amtrak, the postal service and mortgage giants Fannie and Freddie Mae. Pawlenty also wants to repeal “Obamacare” and the Dodd-Frank financial regulatory reform law, as well as block grant Medicaid to the states and raise the Social Security retirement age; he still hasn’t detailed a Medicare plan. All in all, he would reduce federal spending to just 18 percent of GDP, which is less than the 20 percent envisioned by his chief rival, Mitt Romney, and which is about where spending averaged during the Bush years.

Pawlenty’s call for tax reform includes a nice riff on the problem with tax loopholes and federal subsidies, saying that eliminating them will “reduce cronyism, favoritism, and government manipulating markets for political purposes. Business success should depend on winning over customers. Not winning over Congressman.” (Who’s right about ethanol: Pawlenty or Jon Huntsman?)

But I suspect that economists who don’t share his assumptions about the effect tax cuts for the wealthy will have on economic growth will find that this is not a realistic plan for paring down the national debt. What’s more, you don’t need to slash taxes to enjoy an economic boom. Pawlenty notes two recent periods when the U.S. economy grew at a 5% clip — from 1983 and 1987 and from 1996 to 1999. What he doesn’t mention is that both those periods of growth followed substantial tax increases. Bill Clinton’s 1993 budget plan was derided as the biggest tax hike in history, but preceded an economic boom (also fueled by a tech explosion); and Ronald Reagan raised taxes three times during the early-middle 1980s.

Finally, Pawlenty congratulated himself on Tuesday for speaking bold truths. “I promised to level with the American people,” he said. “To look them in the eye. And tell them the truth.” Here’s a truth: The biggest fiscal threat to the country is the exploding growth of health care costs, especially through Medicare. Pawlenty’s speech did not mention the word “Medicare” a single time.

(PHOTOS: Portraits of the Tea Party movement.)