skews13
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- Mar 18, 2017
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Trump took office on a pledge to expand gross domestic product (GDP) at least 3 percent a year. And while he came close to that mark in 2018 through tax cuts and higher government spending, growth slowed to 2.3 percent last year, the weakest annual pace since he took office, according to Commerce Department data released Thursday. The economy stuck exactly to the script that economists thought it would,” said Mark Zandi, chief economist at Moody’s Analytics. “His policies have not added anything to the economy’s performance net-net.”
Slowing economy complicates campaign messaging for Trump
Slowing economy complicates campaign messaging for Trump
- Economic growth is projected to be 1.8 percent over the next decade, which is more than a percentage point below historic levels. This is a reasonable assumption due to a slowdown in the growth of labor, capital, and productivity.
- The aging population is the biggest driver of slower growth. It is responsible for three-quarters of the decline in projected labor force participation and may also be partially responsible for a slowdown in capital and productivity growth.
- While it may be possible to temporarily boost economic growth through demand-side “stimulus,” there is no plausible path to sustained 4 percent growth.
- Even achieving sustained 3 percent growth – a worthy aspirational goal – would be quite challenging. There is little precedent to suggest labor, capital, or productivity growth alone will be enough to generate 3 percent economic growth.
- To grow the economy by 3 percent annually, productivity growth, capital growth, and prime-age labor force participation would all need to return to the levels of the booming 1990s – an unlikely scenario given recent trends.