Trump’s Growth Charade
Officials in President Donald Trump’s administration frequently talk about getting annual US economic growth back above 3%, and their proposed budget assumes that they will succeed. But the assumption is deeply misleading – and potentially dangerous.
WASHINGTON, DC – Officials in President Donald Trump’s administration frequently talk about getting annual economic growth in the United States back above 3%. But they are doing more than just talking about it; their proposed budget actually assumes that they will succeed.
If they do, it would represent a significant improvement over recent performance: the US economy has averaged less than 2% annual growth since 2000. And, while an increase to 3% might sound small, it would make an enormous difference in terms of employment and wages.
Unfortunately, left to its own devices, the economy will most likely continue to sputter. And the policies that Trump’s Republican Party has proposed – for health care, taxes, and deregulation – will not make much difference. The assumption of higher growth is more of an accounting smokescreen for tax cuts than anything else. If administration officials acknowledge that a 3% annual rate is not feasible, they would need to face the reality that their forecasts for tax revenues are too high, and that their proposed tax cuts, if enacted, would dramatically increase the budget deficit and the national debt.