'Making the economy great isn’t easy. Even a $1 trillion tax cut and massive deficit spending could only provide a temporary boost,' writes RexNutting
President Trump argues that he couldn’t possibly be guilty of anything because the economy is so great. Which makes me wonder: Whatever happened to his boast that the U.S. economy would be able to grow not only at 3% but at “4%, 5% or even 6%” per year?
GOP flying high It seems like a million years ago, but in December 2017, when Trump signed the Tax Cut and Jobs Act , the Republicans were flying high. With the tax cut, they had accomplished a significant legislative victory on their top priority issue. They celebrated that the economy would be able to soar once more.
Almost every forecast from professional economists, the Federal Reserve, the Congressional Budget Office, the International Monetary Fund and the Organisation for Economic Co-operation and Development — but not the White House! — looks for growth of around 2% per year for the foreseeable future. With the growth in the potential labor force slowing from about 1% per year to about 0.2%, it’ll take some very good productivity numbers just to hit 2%.
Corporations returned most of their windfall to their shareholders, rather than putting it back into the business. And other data from the Census Bureau show that the tax cut had one other predictable consequence: The rich got richer. The same thing is happening now. Investments in oil fields and other mining facilities have declined 7.7% in the past year as the price of oil CL.1, -0.41% fell from $70 to the mid-$50s. Those investments surged 14% in 2018 when prices were rising.
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