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Trump’s own economists now agree: The GOP tax cuts are a failure

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President Trump’s hand-picked Federal Reserve chairman and White House economic advisers admitted this week that the Republican tax cuts are failing to deliver the economic growth the president promised.

This article first appeared in Salon.

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Trump repeatedly claimed that the Republicans’ $1.5 trillion tax cut primarily aimed at corporations and the rich would pay for itself with annual economic growth above 3 percent. Trump went as far as to claiming the cuts might lead to a GDP growth of 6 percent.

Trump’s White House Council of Economic Advisers (CEA) released an analysis in 2017 showing that slashing corporate taxes by 15 percent would lead to GDP growth of 3 to 5 percent.

On Tuesday, the CEA released a revised report showing that the economic gains will fall far short of their initial forecast.

According to the CEA, growth is projected to slow to 2.5 percent by 2022 and then decline to 2 percent by 2026. Even that estimate is rosy, according to most economists, the Washington Post reports, who expect projected growth to fall to 2 percent well before 2026.

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The CEA numbers are more optimistic than those of independent economists because the White House must assume that all of Trump’s policy proposals will be implemented, the New York Times reports, including his improbable call to make individual tax cuts permanent, an infrastructure package Trump has stopped mentioning, and a rollback of regulations that states themselves would have to implement, which is not under the control of the federal government.

The CEA estimate predicts a strong 3.2 percent growth in 2019, but that number was contradicted by Federal Reserve chair Jerome Powell on Wednesday.

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Powell said in a news conference that GDP growth is slower than expected and the Fed now projects 2.1 percent growth in 2019, well below the White House estimate, and just 1.9 percent growth in 2020.

Powell said that consumer spending and business investment “suggest that growth is slowing somewhat more than expected.” As a result, the Fed is not expected to raise interest rates at all this year over concerns about the slowed growth.

Kevin Hassett, Trump’s top economic adviser, told the Post that the analysis was wrong because the administration was able to achieve 3.1 percent growth over the last year.

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“Everyone said we wouldn’t get 3.1 percent,” Hassett said. “We’re relying on the same analysis because nothing has come up which suggests to us it’s not going to happen.”

Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget, rejected Hassett’s claim.

“We’ve always said 3 percent growth for one year was possible after we gave the economy a lot of stimulus. But you can’t keep giving the economy more stimulus every year,” he told the Post. “There’s nobody that thinks we’re going to be anywhere close to 3 percent growth a year over the next decade.”

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Former Federal Reserve chair Janet Yellen made a similar statement to Marketplace last month, noting that there has not been “any meaningful pickup” in business spending as a result of the tax cuts.

“We had a period of remarkable growth in 2018, probably around 3 percent,” she said. “That just isn’t sustainable.”

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Enjoy this piece?

… then let us make a small request. Like you, we here at Raw Story believe in the power of progressive journalism — and we’re investing in investigative reporting as other publications give it the ax. Raw Story readers power David Cay Johnston’s DCReport, which we've expanded to keep watch in Washington. We’ve exposed billionaire tax evasion and uncovered White House efforts to poison our water. We’ve revealed financial scams that prey on veterans, and efforts to harm workers exploited by abusive bosses. We’ve launched a weekly podcast, “We’ve Got Issues,” focused on issues, not tweets. Unlike other news sites, we’ve decided to make our original content free. But we need your support to do what we do.

Raw Story is independent. You won’t find mainstream media bias here. We’re not part of a conglomerate, or a project of venture capital bros. From unflinching coverage of racism, to revealing efforts to erode our rights, Raw Story will continue to expose hypocrisy and harm. Unhinged from corporate overlords, we fight to ensure no one is forgotten.

We need your support to keep producing quality journalism and deepen our investigative reporting. Every reader contribution, whatever the amount, makes a tremendous difference. Invest with us in the future. Make a one-time contribution to Raw Story Investigates, or click here to become a subscriber. Thank you.



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Trump thinks he can block shipments to Venezuela by posting Navy ships along their coastline

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In a strange turn of national security events, President Donald Trump thinks that he can cripple Venezuela by stationing Navy ships along the coastline of the country. He seems to have forgotten that Venezuela is connected to other countries on its south, west and southeastern border.

According to Axios, five current and former officials have either directly heard Trump say it or have been briefed on his plan.

The plan would be to blockade the country in the south Carribean for at least a year and a half.

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Trump blames Ocasio-Cortez for two Democrats who were nearly barred from Israel

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President Donald Trump tweeted out Sunday that Democrats are ready to wage war against Israel because the prime minister followed his direction to ban Congresswomen from coming to the country.

Israel backed off after an uprising from both conservative and liberal groups, saying the purpose of any international visit should be to help educate, regardless of the support for the country.

"House Democrats want to take action against Israel because it is fighting back against two (maybe four) people that have said unthinkably bad things about it & the Israeli people. Dems have such disdain for Israel! What happened? AOC Plus 4 is the new face of the Democrat Party!" Trump announced.

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2020 Election

‘Part of me wanted to leave’: Lone attendee of Steve King town hall turns out to be a ‘hungover’ Democrat

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Rep. Steve King (R-IA) is being told to resign by members of his own party who are tired of his overt racism. While many Republicans might exhibit racist tendencies and make apologies for the president's racism, King says things out loud the GOP would just assume he keep quiet on. The true test, however, comes from King's own district and whether or not they're willing to reelect him in November.

The key revelation came at a recent townhall King held, where the only person who attended was a hungover Democrat. The Iowa Starting Line reported the pathetic event, where it seemed more members of the press were willing to show up than actual constituents.

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