Trump said GOP tax bill would be 'rocket fuel,' but US economy slowed instead
Economic growth slowed between 2017 and 2018, the first year after the Republican tax bill was signed into law.
Trump promised the GOP tax bill would spur massive economic growth, but new data released Friday from his own Commerce Department show the economy slowed down in 2018, the first year the tax law went into effect, compared to 2017.
According to the Associated Press, the Commerce Department revised economic growth numbers from 2014-2018 based on more comprehensive data, and the results paint a bad picture for Trump’s continued boasts about the tax law.
In 2018, the U.S. economy grew by only 2.5%, somewhat slower than the 2.8% GDP growth in 2017. The 2018 downward revision is significantly less than the initial estimate of 3.1% growth. The main cause of the lower estimate is that businesses invested less on buildings, equipment and software than the Commerce Department initially thought.
The slower growth is in direct contradiction to the promises Trump made before the bill was signed into law.
“These massive tax cuts will be rocket fuel,” Trump proclaimed, “rocket fuel for the American economy.”
As recently as May, Trump was making the same boast, telling the National Association of Realtors, “At the heart of America’s revival are the massive tax cuts that I signed into law a year ago. And they are like rocket fuel for America’s economy.”
As Trump campaigned in 2016, he promised outlandish economic growth. During one of the presidential debates that year, Trump promised at least 4% economic growth, and then went further.
“And I actually think we can go higher than 4 percent. I think you can go to 5% or 6%,” Trump said.
Yet in his first two years in office, the GDP growth has not even cracked 3%, let alone 5% or 6%.
Rather than act as “rocket fuel” for the economy, the GOP tax law (which no Democrats in the House or Senate supported) did significantly increase the national deficit. In fact, the law increased the deficit by nearly $2 trillion, with most of the tax cuts going to Wall Street corporations and eventually ending up in the pockets of the wealthiest one percent.
Meanwhile, working-class families are being left out in the cold, with wages increasing slowly, if at all, and bonuses from corporations failing to materialize.
And the future under Trump does not look any better.
Before the revised numbers were released, Mark Zandi, an economist with Moody’s Analytics predicted, “2018 will be the high-water mark for growth in the Trump administration.” Zandi expects as low as 1.1 percent growth in 2020.
Trump promised “rocket fuel,” but all Americans got was a dud of a tax bill and slower economic growth.
Published with permission of The American Independent Foundation.
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