In light of recent events, the focus of the media has been on whether or not America ought to tear down statues of Civil War era figures or others who were on the side of the Confederacy. It's important, however, to keep an eye on something that is much more important for average Americans than ideological purity battles about events of 160 years ago.
That item is the accelerating growth rate of the economy. During the first quarter of 2017, the economy grew at a rate of about 1.2% according to the latest government figures. That quarter was the last fully Obama quarter. While President Trump took office one-third of the way through that quarter, no president can change the trajectory of the economy in just two months, so Obama gets full credit for the quarter's results. The second quarter of 2017 grew at a 2.8% rate according to the latest government figures. President Trump gets more credit for that although he cannot lay total claim to the doubling of the growth rate for two reasons. First, for the last few years, the first quarter has underperformed while the second quarter has over performed. Something in the government's methodology for measuring economic growth has distorted the results for these two quarters each year, and 2017 may be no different. Second, even after two months in office, it is difficult for a president to make a major change in the direction of the economy. By the end of the second quarter, however, it is much more the Trump economy than the Obama economy. That brings us to the third quarter of 2017 which is only a little more than half over. The Atlanta Fed has a projection of economic growth for the quarter which is currently showing just under 4% growth rate. The Atlanta Fed projection has been the most accurate tool for predicting the growth rate in recent years, so it's prediction of a rather high rate of growth is significant. Sure, the prediction could change as we near the end of the quarter. And, of course, the Atlanta Fed prediction could be wrong. Nevertheless, it's been many years since we've seen a projection of growth this high for the US economy.
It's important to remember that a whole slew of the economic "experts" have told us that 2% growth was the new normal and that we would need to get used to it. These experts deride President Trump's goal of 3% growth as a pipedream; it just cannot happen -- or so they told us. If we grow faster than 3% and if that growth continues, these "experts" will be shown to be totally wrong. And remember, by growing and extra 1%, the economy adds about 180 billion dollars of activity each year. Just think how many new jobs that produces. Consider how much in additional government revenue that brings in. Remember how much that added prosperity reduces the need for food stamps and other federal welfare payments. Finally, consider how much faster the economy will grow once the corporate tax rates and structures are reconfigures to promote growth and investment rather than to retard it like now.
That item is the accelerating growth rate of the economy. During the first quarter of 2017, the economy grew at a rate of about 1.2% according to the latest government figures. That quarter was the last fully Obama quarter. While President Trump took office one-third of the way through that quarter, no president can change the trajectory of the economy in just two months, so Obama gets full credit for the quarter's results. The second quarter of 2017 grew at a 2.8% rate according to the latest government figures. President Trump gets more credit for that although he cannot lay total claim to the doubling of the growth rate for two reasons. First, for the last few years, the first quarter has underperformed while the second quarter has over performed. Something in the government's methodology for measuring economic growth has distorted the results for these two quarters each year, and 2017 may be no different. Second, even after two months in office, it is difficult for a president to make a major change in the direction of the economy. By the end of the second quarter, however, it is much more the Trump economy than the Obama economy. That brings us to the third quarter of 2017 which is only a little more than half over. The Atlanta Fed has a projection of economic growth for the quarter which is currently showing just under 4% growth rate. The Atlanta Fed projection has been the most accurate tool for predicting the growth rate in recent years, so it's prediction of a rather high rate of growth is significant. Sure, the prediction could change as we near the end of the quarter. And, of course, the Atlanta Fed prediction could be wrong. Nevertheless, it's been many years since we've seen a projection of growth this high for the US economy.
It's important to remember that a whole slew of the economic "experts" have told us that 2% growth was the new normal and that we would need to get used to it. These experts deride President Trump's goal of 3% growth as a pipedream; it just cannot happen -- or so they told us. If we grow faster than 3% and if that growth continues, these "experts" will be shown to be totally wrong. And remember, by growing and extra 1%, the economy adds about 180 billion dollars of activity each year. Just think how many new jobs that produces. Consider how much in additional government revenue that brings in. Remember how much that added prosperity reduces the need for food stamps and other federal welfare payments. Finally, consider how much faster the economy will grow once the corporate tax rates and structures are reconfigures to promote growth and investment rather than to retard it like now.
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