Over Thanksgiving, Yahoo News published an article claiming that the Republicans' "tax cut party is officially over." It was an amazing bit of nonsense. Basically, the article says that the economy got much better but now it is slowing a bit, so the tax cuts failed. This is the liberal Democrat explanation that the economy isn't really good.
Let's look at a few of the claims:
1. Wages are growing at only 3.1% "which is barely ahead of inflation." Amazing. During the entire Obama presidency, real wages were stagnant or declining. In other words, wages did not grow as fast as inflation. That means that the average American did not get a pay raise after inflation even once during the Obama years. Now, just ten months after the tax cuts went into effect, we have wages growing at more than 1% fast than inflation. That means a raise for the average American. That's great news, not bad news as Yahoo portrays it. For the average family with income of 50,000 dollars per year, that's an extra $500 per year. That may mean little to the wealthy liberals in Manhattan, DC and San Francisco, but it's a lot for the average family.
2. The economy grew at only 4.2% in the second quarter and about 3.5% in the third quarter, but there's a forecasting firm that says it will only grow at 2.3% in the fourth quarter. Yahoo calls this "weak". Remember that for the eight years of Obama, the economy never once grew at 3% or higher. If the current economy is "weak", then the Obama economy was stagnant at best and terrible if properly viewed. Since Trump took over, the US economy has far outstripped the Obama years.
3. The stock market is not up a great deal in 2018. That's true, but it shouldn't be a surprise. The stock market is always looking ahead. In the second half of 2017 when the tax cuts were expected to pass, the markets soared. Since then, it has gyrated up and down, but it's basically at the same place it was when about a month after the tax cuts passed. Anyone who understands the markets at all also understands that they don't always just go up.
4. Yahoo also claims that there hasn't been a big surge in business investment since the tax cuts passed. That's another sign that the reporter doesn't understand how the economy works. Businesses don't sit around waiting for a tax cut with "shovel ready" projects. Once the lower rates are in position, it takes time until new investments are considered and green-lighted. The increase in investment will come over many years. Each extra investment will have a lasting positive effect on the US economy. It will take time for all this to work, however. Remember, after the big Reagan tax cuts, the US economy felt their impact for roughly 25 years. We've only had ten months with the latest cuts.
Let's look at a few of the claims:
1. Wages are growing at only 3.1% "which is barely ahead of inflation." Amazing. During the entire Obama presidency, real wages were stagnant or declining. In other words, wages did not grow as fast as inflation. That means that the average American did not get a pay raise after inflation even once during the Obama years. Now, just ten months after the tax cuts went into effect, we have wages growing at more than 1% fast than inflation. That means a raise for the average American. That's great news, not bad news as Yahoo portrays it. For the average family with income of 50,000 dollars per year, that's an extra $500 per year. That may mean little to the wealthy liberals in Manhattan, DC and San Francisco, but it's a lot for the average family.
2. The economy grew at only 4.2% in the second quarter and about 3.5% in the third quarter, but there's a forecasting firm that says it will only grow at 2.3% in the fourth quarter. Yahoo calls this "weak". Remember that for the eight years of Obama, the economy never once grew at 3% or higher. If the current economy is "weak", then the Obama economy was stagnant at best and terrible if properly viewed. Since Trump took over, the US economy has far outstripped the Obama years.
3. The stock market is not up a great deal in 2018. That's true, but it shouldn't be a surprise. The stock market is always looking ahead. In the second half of 2017 when the tax cuts were expected to pass, the markets soared. Since then, it has gyrated up and down, but it's basically at the same place it was when about a month after the tax cuts passed. Anyone who understands the markets at all also understands that they don't always just go up.
4. Yahoo also claims that there hasn't been a big surge in business investment since the tax cuts passed. That's another sign that the reporter doesn't understand how the economy works. Businesses don't sit around waiting for a tax cut with "shovel ready" projects. Once the lower rates are in position, it takes time until new investments are considered and green-lighted. The increase in investment will come over many years. Each extra investment will have a lasting positive effect on the US economy. It will take time for all this to work, however. Remember, after the big Reagan tax cuts, the US economy felt their impact for roughly 25 years. We've only had ten months with the latest cuts.
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