The long term effects of the Trump administration are still taking shape. Donald Trump claims that his time as president of the United States is the best thing that ever happened to the country — or close to — but the Congressional Budget Office begs to differ. They estimate, via a new report, that in 2018, the economy will finish with 3.1 percent growth over last year. That August estimate is 0.2 percent lower than the 2018 economic growth estimate they put out in April.
The downward tick in their estimates undercuts the Trump team’s touting of 4.1 percent growth in this year’s second quarter. On August 3, Trump himself tweeted:
‘July is just the ninth month since 1970 that unemployment has fallen below 4%. Our economy has added 3.7 million jobs since I won the Election. 4.1 GDP. More than 4 million people have received a pay raise due to tax reform. $400 Billion brought back from “overseas.”’
It’s been said before, but the fact remains that strong job growth began before Trump took office. That factor of the situation is simply a continuing trend line from the Barack Obama-era.
Although “the stars aligned” for a 4.1 percent GDP in the second quarter of 2018, that growth isn’t going to stick around, according to the Congressional Budget Office.
They share:
‘Such moderation occurs because several factors that boosted second-quarter growth — including a rebound in the growth of consumer spending from a weak first quarter and a surge in agricultural exports — are expected to either fade or reverse.’
A dip in agricultural exports is following Donald Trump’s pet trade wars. China, for instance, has cancelled over $1 million worth of specialty food grade soybeans from North Dakota farmers. Taking $1 million out of an economy is no small deal, no matter how many billions Trump makes up that he has.
In addition, among other examples, Mexico imposed retaliatory tariffs last month on American agricultural goods like apples, cranberries, and various cheeses. Those tariffs followed earlier announced retaliatory tariffs on goods like pork, potatoes, and whiskey and range between 15 and 25 percent.
Some companies, when faced with the burden of tariffs from other countries responding to the ones Trump imposed, have announced plans to move some operations overseas. The car manufacturer BMW and Harley Davidson both did so.
American farmers, though, can’t do that. They can’t simply pack their farm onto a boat and ship it across an ocean or a border. Thus, despite all of the Trumps’ grand promises, the newly revealed downward trend of CBO growth predictions points to Americans having their livelihoods threatened.
In addition to the aforementioned estimates, the Congressional Budget Office expects the economy to grow by 2.4 percent in 2019. That’s 0.2 percent below the 2.6 percent margin it grew by last year, in 2017.
Beyond that point, CBO estimates 1.7 percent growth from 2020 to 2026 and 1.6 percent growth in 2027 and 2028. The latter August estimate is below the April CBO projection of 1.8 percent growth in 2027 and 2028.
The numbers all combine to paint a picture that is in stark contrast to Donald Trump’s promises of some kind of economic utopia. As it turns out, relying on questionable past business experience in building a method for running an entire country doesn’t work.
Featured Image via YouTube screenshot
