I smell something fishy with our so-called great economy. The 2017 tax law passed by Republican-led House and Senate and signed by Trump added $1.45 trillion to the federal deficit. The one that Trump promised to erase in eight years grew by 77 percent in one year.
In addition to growing budget deficits, Trump has grown the trade deficit to a record $891.2 billion, the highest in history. It, along with our federal debt, is growing astronomically. Corporations used the money Trump gave them with the tax law to buy back their own stock to make themselves even richer, rather than use it to pay people more or put the money back into the economy which was the Pablum they sold us. Even foreigners are making out better with the new tax cut. Companies used the tax cut to buy back stocks where it’s estimated that 30% is owned by foreigners.
Trickle-down isn’t going to happen. It used to be that if your business was doing well, you were hiring and giving your employees raises, as indicators of Main Street’s health, optimism and job growth went hand-in hand. But now, that’s not the case anymore. The definition of a “good year” has changed. Now, growing sales without growing payroll feels great to most business owners.
But thank goodness with Trump’s new tax cut JP Morgan was able to raise their 2018 profits by $3.7 billion - from $28.8 billion to $32.5 billion; a full 12.8% in one year. CEO Jamie Dimon received a sweet $31 million bonus. So Trump cult - if your tax return isn’t as big as you were promised, you just paid the bills and JPMorgan thanks you.
Trump is still riding on Obama’s economic coattails. He took office when the economy, wage and job growth were strong, yet he ran up our debt to epic proportions. The most common delusion of Trump’s base is that Trump is responsible for our strong economy and Fox News promotes it. A station that says chocolate milk comes from brown cows will always have your back.
More than ever before, the majority of economists and money managers, except ones working for Trump, predict a recession within two years. “Trumpcession” will hit just when Democrats take office and Republicans will immediately blame them for it.
Trump boasts he lowered the unemployment rate but that started under Obama. Since then the U.S. has had 100 straight months of increased employment and Trump can’t take credit for that. In fact, during the last 19 months of Obama’s term more jobs were added (206,000 per month) than Trump’s first 19 months in office (193,000 jobs per month). Unemployment is down all alright, but many people have to work 2-3 low wage jobs to pay the rent and 61% of Americans can’t afford a $400 unexpected cost.
Trump brags that our GDP is the highest ever. Wrong again. Obama generated four years of higher GDP growth than Trump has.
Trump’s booming economy: job creation 4% lower than Obama’s last two years; GDP peaking at 2.9% - the same as it was under Obama in 2015; deficits up over 50% in a supposedly “booming” economy; trade deficit at record levels; and billions spent on subsidies to offset trade wars. Isn’t it great to have a businessman as president?
John F. Kennedy said “The time to fix a roof is when the sun is shining.” It was pouring rain when Obama took office but he managed to fix it. The sun was shining when Trump took office, but he decided to blast a bigger hole in it.
Steven Seymour is a Vietnam veteran who lives in Navasota and writes a bi-weekly opinion column. The opinions expressed by the author do not necessarily reflect the opinions and viewpoints of The Examiner.