The Trump slump is coming. It may be here already
It appears this was the week where the economic fantasies put forth by The Man Who Lost the Popular Vote came back to reality. The headlines on Thursday were not pretty:
Wall Street Journal: U.S. Economy Had Less Momentum Heading Into 2019 as Corporate Profits Stalled
NBC News: Economy slumping faster than expected, with fourth-quarter GDP revised down
Washington Post: GDP revised downward for 2018 as U.S. economy shows more signs of slowing
As the headline of a New York Times analysis put it: “Trump Owns the Economy Now, for Better or Worse.” Trump, both before and since taking office, has repeatedly promised to increase U.S. economic growth to 4 percent per year: “We’re bringing it (the GDP) from 1 percent up to 4 percent. And I actually think we can go higher than 4 percent. I think you can go to 5 percent or 6 percent.” Putting aside legitimate concerns about the usefulness of GDP as a measure, we now know that Trump has failed, again, to not only reach 4 percent annual growth, but even to reach 3 percent.
The only way he got within shouting distance of 3 percent for 2018 was by enacting a budget-busting, $1.5 trillion bonanza of tax cuts aimed mostly at billionaires and millionaires that has done little other than lead to stock buybacks that pad the corporate bottom line. According to the Tax Policy Center, households in the top 1 percent will walk away with a bigger chunk of the benefits from Trump’s plan than will those in the bottom 60 percent combined. That kind of temporary economic growth reflects a “sugar high”—and any parent or caregiver knows what happens not too long after that sugar high goes away. The “headache” is coming soon.