What sort of machine is the economy? The common conception is that it’s a fragile and sensitive device, highly responsive to both good and bad government policies. Pessimists worry that one or two wrong moves from Washington will cause it to seize up. Optimists think the right change in tax or regulatory policy can supercharge it. The administration shares this general outlook.
Early in Donald Trump’s presidency, he and his economic advisers hailed what was coming. With Trump’s policies, declared Stephen Moore, “four percent growth can and should be the new normal in America.” After the president signed his big tax cut, Lawrence Kudlow said, “We’re on the front end of an investment boom.”
It was a nice fantasy. In 2017, real GDP grew by 2.2 percent; in 2018, it increased by 2.9 percent. In 2014 and 2015, under Barack Obama, the figures were 2.5 percent and 2.9 percent.
View the complete July 16 article by Steve Chapman on the National Memo website here.