The Mojo of Trumponomics
T.S. Eliot famously wrote that April is the cruelest month, but when it comes to America’s fiscal picture, nothing could be further from the truth about this April. The latest government numbers confirm that last month was a blockbuster for growth, federal revenues and deficit reduction.
One of the key principles of Trumponomics is that faster economic growth can help solve a multitude of other social and economic problems, from poverty to inner-city decline to lowering the national debt.
We’re not quite at a sustained elevated growth rate of 3 percent yet, but the latest economy snapshot tells us we are knocking on the door. The growth rate over the last four quarters came in at 2.9 percent, which was higher than any of the eight years of Barack Obama’s presidency. Halfway through this current quarter, which began on April 1, the Atlanta Federal Reserve estimates growth at 4 percent. If that persists through the end of June, we will have reached an average growth rate of 3 percent under Donald Trump.
Not bad, given that nearly every liberal critic trashed the president’s campaign forecast of 3 percent to 4 percent growth as an impossible dream. Economists such as Larry Summers, Obama’s first chief economist, gloomily declared that we were mired in a new era of “secular stagnation” and that 3 percent growth was unachievable. Paul Krugman of The New York Times said it was more likely we would see flying cars than 3 percent to 4 percent growth.
Now for the even-better news. We are already starting to see a fiscal dividend from President Trump’s tax, energy and pro-business policies. The Congressional Budget Office reports that tax revenues in April — by far the biggest month of the year for tax collections because of the April 15 filing deadline — totaled $515 billion, which was a robust 13 percent rise in receipts over last year.