Then there is the argument that Trump’s policies have nothing to do with the American prosperity burst. Politico’s economics reporter recently published a column insisting that the “GOP tax cut is not why (the) economy is booming.” He contemptuously added, “Economist are rolling their eyes at candidates’ claims (that Trump’s policies inspired faster growth).” Which economists?
As it happens, this is the same gang that was dead wrong about the likelihood of growth in the first place. Now they argue that the tax cuts are just kicking in and can’t account for the increased economic activity. But this ignores the anticipatory effect: Businesses are anticipating the tax bill’s lower rates on their profits and investments and making decisions accordingly.
Whatever the cause, it is undeniable that America has a new spring in its step. After a decade of malaise, the American economy is the envy of the world today. A recent Bloomberg article reports: “The U.S. dethroned Hong Kong to retake first place among the world’s most competitive economies, thanks to faster economic growth and a supportive atmosphere for scientific and technological innovation, according to annual rankings by the Switzerland-based IMD World Competitiveness Center.”