US economy a disaster waiting to happen

By: kal kommie



Let's look at your claims invidivually starting with the group of items you claimed were "flat under Obama"

1. Best ever unemployment

The unemployment rate is lower than it's been since the 60s, but are not record lows. Additionally, as Trump pointed out during the 2016 election while criticizing Obama, today we have millions of eligible workers no longer looking for work who are thus not counted as "unemployed". Most importantly, unemployment wasn't "flat under Obama"! Unemployment exploded his first two years (due to the 2008 crash) and then decreased the next 6 years after his economic plan went into effect. The ongoing surge in employment is due to one thing: QE, which Obama initiated and Trump wishes to continue but the FED wants to end. It has nothing to do with reguations, tax cuts, infrastructure. 

https://data.bls.gov/pdq/SurveyOutputServlet

https://www.forbes.com/sites/chuckjones/2018/12/08/trumps-tax-cuts-havent-spiked-job-growth/#b4006922df9d

2. high GDP

The growth in GDP this year is indeed because of the tax cut, but it's steroidal, like Obama's stimulus package. It will cost the economy more growth in the long run than it will create in the short run. The IMF estimates it will have a net negative effect on the economy starting in 2020, and the negative effect will get stronger thereafter

https://www.marketwatch.com/story/sugar-high-two-new-reports-say-economic-boost-from-tax-cuts-may-be-fleeting-2018-04-17

GDP growth wasn't flat under Obama either. It cratered early (thanks again 43) then was pulled from the abyss and returned to the mediocre Bush II levels. Trump's first year was nothing different

https://www.google.com/search?q=us+gdp+by+year&oq=us+gdp+by+year&aqs=chrome..69i57j0l5.2898j0j7&sourceid=chrome&ie=UTF-8

3. strong business investment

Again, the tax cut sugar rush. Bureau of Economic Analysis projects nonresidential investment growth to return to pre 2018 Q2 levels in 2019. Investment was actually disappointing compared to many rosy predictions. And yet again, your claim about business investment being "flat under Obama" is false. There were 6 different quarters in Obama's first term with investment growth that was comparable or stronger than Trump's best quarter.

https://www.nytimes.com/2018/12/31/opinion/trump-2018-charts.html

4. manufactuing optimism

Score one for Trump. weeeee

Now let's look at the items that you credited for making the economy great again

1. rolling back regulation

As promised, Trump has been a very permissive regulator. The strength of these effects on the overall economy are negligible -- the administration claims $8 billion in 2017 which even if true is a tiny drop into the $19.6 trillion US economy -- and the savings to proprietors is had by shifting the regulatory burden onto the people at large. 

https://www.industryweek.com/economy/great-regulation-rollback-finally-here-it-working

2. tax cuts

CBO projects massive long-term deficits thanks to the tax cuts. Goldman Sachs, Morgan Stanley, the IMF and a bunch of other mainstream economic oracles agree on its long term negative impact. The only people who will ultimately benefit from this are the capital class: corporations and the 1%. 

3. re-investment into infrastructure (...?)

What re-investment? You haven't heard any reporting on it because it hasn't happened! Trump's first proposal failed to get through Congress despite Republican control of both houses and broad Democrat support for infrastructure programs. It failed because it only called for the federal government to fund 20% of the $1.5 trillion costs. The rest of the costs were going to be foisted on the states, counties and cities. Now Trump has a new, more practical and less stupid plan but its significance to him is telegraphed by his eagerness to use it as a political football. 

http://www.governing.com/columns/washington-watch/gov-trump-infrastructure-plan.html

https://www.dailymail.co.uk/news/article-6456409/Trump-offer-House-Democrats-new-federal-infrastructure-spending-package.html

 

I'm not betting on an economic downturn due to natural volatility. There were huge problems before Trump took over and instead of addressing them he's making them worse or making new problems. This is going to catch up with him soon.

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