Don't buy Trump's boasts of historic growth (Ted Kaufman)
The president of the United States “consistently congratulates himself about dozens of ‘historic’ accomplishments and he is always wrong.” (emphasis added) But according to the writer, Trump’s claim of responsibility for “an economic turnaround of historic proportions” is the worst yet.
First, the real economic turnaround came years ago. In 2009, newly elected President Barack Obama rallied the country to combat the worst economic crisis since the Great Depression of the 1930s. Within a month after he signed the American Recovery and Reinvestment Act of 2009, the stock market hit bottom and soon thereafter job losses turned into job gains. By the end of his second term, the country had experienced 75 straight months of job growth. And this was the economy Trump inherited in January 2017.
Second, no one questions that the economy has continued to do well since January 2017. Indeed, the rate of economic growth has accelerated, the stock market got an extra bounce upward, and the GOP tax cut probably had something to do with it. However, “that cut has had a major negative effect on the financial stability of the country.”
Third, here’s a litany of specific concerns. - Wealthy individuals, banks and corporations have taken advantage of the reduced taxes and generous tax loopholes, with corresponding “losses in federal government revenues.” The annual deficit for FY 2018 was $779B, $113B more than for FY 2017, and next year’s deficit could be $1T or so. Federal debt held by the public is now at its highest level since shortly after World War II, and the Congressional Budget Office projects it will keep growing faster than GDP for the foreseeable future. Congress used to follow a PAYGO rule, requiring offsets for spending increases or tax cuts; alas, PAYGO has been suspended. Last Friday, stock prices fell again. And there is a “new Trump promise to cut middle-class taxes by 10 percent before the next election. Maybe just after the Mexicans pay for The Wall?”
The economy did recover after 2009, as stated, but the pace of recovery was relatively slow. Meanwhile, spending and deficits soared to record levels. The claim that the Republican tax cuts unduly favored the affluent and big corporations is overdone. Middle class taxes were cut as well. Also, corporate income taxes are a cost of doing business that is passed on to consumers through higher prices.