Cut Taxes, Grow Economy
Despite the naysayers, the latest GDP report reveals more good economic news for the nation.
It’s not news that the economy has emerged from the doldrums of the previous administration and is growing at a healthy pace. Yesterday’s release of fourth-quarter and full-year GDP numbers was another confirmation.
Fourth-quarter growth was a modest but higher-than-expected 2.6%, slowing from 3.4% in the third quarter and 4.2% in the second, and growth for calendar year 2018 was a healthy 2.9%. Yes, that’s just shy of President Donald Trump’s promise to grow the economy at 3% or more each year. Yes, it marks a record 13th straight year without 3% growth. And yes, the government shutdown may have put just enough drag on the economy that it missed the 3% mark.
But the White House offered a slightly different measurement, backed up by Bloomberg: “GDP grew by 3.1 percent from the fourth quarter of 2017 to the fourth quarter of 2018,” which “represents $280 billion more in American economic output” than if previous trends had continued. In any case, it’s part of a significant upward trend since Trump took office. Remember when Barack Obama and his Keynesian stimulus pals informed us that 2% growth may be the “new normal”? Or when former Obama adviser Larry Summers dismissed the idea that tax cuts would yield growth unless “you believe in tooth fairies and ludicrous supply-side economics”?
Well, according to Jim Moran, chief investment officer at Plante Moran Financial Advisors, “For all the hand-wringing and angst, you’d have to go back to 2005 to find a year in which the economy grew at a faster pace.” The bottom line: The Trump administration has an exemplary record on tax cuts, deregulation, and economic growth.
However, we’ve said repeatedly over the last two decades that the economy in many ways amounts to a measurement of consumer confidence — a measurement that’s pretty high right now. We’ve also warned that Democrats are so set on their “Hate Trump” campaign, especially leading into 2020, that they actually want a recession. How will they get one? Undermining consumer confidence with incessant Leftmedia doomsaying.
A prime example is the yarn that Republican tax reform is yielding smaller tax refunds — due to limited deductions for some and smaller withholding for others. Well, The Daily Signal reports, “Tax refunds have increased this week, the Treasury Department announced Thursday. … The average refund at this point in the filing season is now up 1.3 percent over last year.”
Either way, Heritage Foundation fiscal policy analyst Adam Michel gets it right: “The important point to remember is that 90 percent of Americans got a tax cut. It is likely that more Americans will also get larger refunds, but the two are not connected.” What is connected is that when the government confiscates and redistributes less of our money, the economy grows more substantially.