With
the stock market Dow Jones dropping 666 points today in addition to
earlier big decreases in the last few days, the question arises, "is the
US economy really in as good a shape as economic pundits and Donald
Trump wants us to believe?Let us look at some of the facts.
Trump said as president he would be bringing economic growth “from 1% up to 4%.” He added, “I actually think we can go higher than 4%.”
By the time Trump’s team submitted its first budget, that number shrank to 3%. Unfortunately for Trump and everyone else counting on it, he missed each one of those targets. Meanwhile, our neighbors and allies kept moving forward.
Here’s how U.S. growth has looked under Trump and what it means for most Americans in 2018.
After two consecutive quarters of growth just above 3%, economists and the Trump administration got bad news about the last three months of 2017. During that time, GDP growth slipped to 2.6%.
When that report came out, Trump had just given his late January speech at Davos. “After years of stagnation, the United States is once again experiencing strong economic growth,” the president said.
However, the rate for his first 11+ months in office was even lower.
Technically, Trump didn’t enter office until late January 2017, so 20 days of the past year fall under the Obama administration. However, for that mostly Trump period, the U.S. economy grew 2.3% for the year.
Looking at recent history, this pace of growth is normal, but it falls well below the expectations set by the first businessman president. Besides, what about all the folks getting bonuses and companies hiring following the GOP tax plan passing? Didn’t that movement boost economic numbers?
Trump’s tax plan slashed the corporate rate by over 40%, meaning billions for some of the richest Americans and many companies. However, a late January 2018 report showed hardly any working Americans joining in on the fun.
According to a Reuters/Ipsos poll, only 2% of U.S. adults got a raise, bonus, or another new type of benefit following the tax cuts passing in December 2017. It’s difficult to see substantially higher growth without more money circulating to first-time small business owners.
The Republicans don't like to mention it, but natural disasters last year made a dent of $306 billion in the US economy.
Other budget items that will affect the US economy are.the border wall $700 million or more, Infrastructure 1.5 trillion. .Military budget expansion $716 billion.
You don't have to be Einstein to figure out that expenditures based on receivables re taxes etc. will increase the deficit by large numbers.
And if all this is not enough, as one economist noted, given Trumps skirmishes with the US judicial system including the FBI - re Russian investigation, the US is also only a few "Trump tweets" away from a constitutional crises, and major upheavals within the US political and financial establishment.
Bottom-line: the US overall health is not in good shape and that 666 point drop of the Dow Jones could very well be the beginning of a major meltdown,
EU-Digest
