Facts On The Trump Economy (Since You Won’t Get Them At SOTU)
Last week newly-elected Joint Economic Committee Vice Chair Don Beyer (D-VA) addressed President Trump’s false claims on the economy during a special order hour on the House Floor.
Today, writing in The Hill, Beyer went into further detail to rebut some of the claims the President is expected to make on the economy during his State of the Union Address this evening before a joint session of Congress:
When the president gives his State of the Union address this week, I expect him to demand credit for our strong economy. Doubtless, he will chalk it up to his supposed business acumen. History tells us much of what he says will be false or misleading.
The president told a lie recently in a speech at Davos that we should expect to hear again: that the economy he inherited from Barack Obama was “in dismal shape.” He said that the current economy is booming due to his magic touch—not because Barack Obama helped dig us out from the worst recession since the Great Depression, or because of the hard work and ingenuity of American businesses and workers.
This is revisionist history—far from the truth.
It’s one of more than 1,500 lies or misleading statements President Trump has made since his inauguration on the economy alone, according to The Washington Post Fact Checker. He has made more than 16,000 false or deceptive statements on all issues combined.
Was the economy a wreck as the president imagines? Did his tax cuts supercharge economic growth? Has the president’s trade war helped American businesses and consumers? The evidence shows these assertions are absolutely false—and that in some ways Trump economic policy has done more harm than good.
Let’s look at the facts. When President Trump took office, the economy was strong and getting stronger. Unemployment had been cut by more than half and stood at 4.7 percent. The economy had added jobs for 76 straight months. Wages were rising, inflation was low, GDP growth was solid. To call this “dismal” is ridiculously dishonest.
In important ways, the economy under Donald Trump has lagged behind the economy under Barack Obama. Let’s look at job growth—in the first 35 months of the Trump administration, the economy added about 191,000 jobs per month. In the last 35 months of the Obama administration, approximately 227,000 jobs were created each month. That’s 36,000 fewer jobs each month under Trump.
How about business investment, which is key to long-term economic growth? The Republican tax cuts, the president’s signature legislative accomplishment, were supposed to accelerate investment. But growth in business investment has slowed after a small initial bump and it now has declined for three consecutive quarters.
GDP growth also has disappointed. The president promised that his nearly $2 trillion in tax cuts would be like “rocket fuel” for the economy. GDP growth would be as high as 6 percent!
But that hasn’t happened—the “rocket fuel” didn’t power the economy skyward. Annual GDP growth has not reached 3 percent since the tax cuts were enacted, and it slowed to 2.3 percent in 2019.
Part of the challenge is that the president’s trade war has created headwinds for the economy. It has harmed everyone from American suppliers to farmers to wholesalers to retailers to consumers. The nonpartisan Congressional Budget Office (CBO) estimates that the administration’s trade policies will shave 0.5 percent from GDP this year and reduce average household income by nearly $1,300.
Finally, there is the cost of the tax giveaways—the increase to our national debt. The president and his advisers promised that their 2017 tax cuts would pay for themselves. There was extensive reporting on the second year anniversary of the tax cuts in December that this claim has proven false. However, just last week, Treasury Secretary Steve Mnuchin doubled down on this myth.
CBO estimates that the tax cuts will add $1.9 trillion to our national debt. Deficits already have rocketed higher, from $585 billion during the last year of the Obama administration to $984 billion in 2019. CBO forecasts the deficit will reach $1 trillion this year and an average $1.3 trillion between 2021 and 2030.
These fast-growing deficits when the economy is strong constrain investments we should be making in education and infrastructure now and will limit our fiscal response when we have to confront the next recession.
I suspect that these facts won’t make it into the president’s State of the Union Address. As with so many other subjects, he will have “alternative facts.” Even though his version of reality has been proven to be fanciful, he will continue to claim that he inherited a “dismal” economy from Barack Obama and that he has worked miracles. This isn’t remotely true. The fact checkers are going to be very, very busy.