Economy

Economists Lower Long Term Growth Forecasts

JM Ashby
Written by JM Ashby

Before they passed their tax cuts for corporations and the rich in December of 2017, many Republicans claimed it would unleash the economy and lead to permanently-higher growth. Some even said it would lead to permanent 4 percent growth.

Now, we knew that wasn't going to happen, but growth is actually trending downward.

The Commerce Department has released a preliminary assessment that the economy grew by 2.9 percent in 2018, but some economists now say that was probably a high-water mark for the Trump regime.

Thursday's preliminary 2.9 percent figure could later be revised, although economist Mark Zandi of Moody's Analytics said the most likely direction would be down.

For the rest of the president's term, economic forecasters agree, that number will decline.

"2018 will be the high-water mark for growth in the Trump administration," Zandi predicted. He expects the decade-old economic expansion will shrink to 1.1 percent growth in 2020, with a better-than-even chance of recession.

What you may not see discussed or conveyed anywhere else is that this 2.9 percent figure -- this high-water mark for growth under Trump -- was itself an anomaly.

You may recall that the economy grew at an annualized rate of over 4 percent during the second quarter of 2018, but you may also recall why that happened.

Imports and experts surged during the second quarter of 2018 as corporations and businesses rushed to get ahead of Trump's trade war; before retaliatory tariffs from Mexico, Canada, and China hit the books. That last-minute surge in trade led to a temporary blip in economic growth that we may not see again for years.

If economic growth shrinks to just 1.1 percent in 2020, we could see a few months during the year that look like a recession.

  • muselet

    “[A] better-than-even chance of recession.”

    Which the Rs will promptly blame on taxandspendDemocrats!, and will push for more tax cuts (because tax cuts supercharge the economy!) and austerity measures (because we can’t afford to keep Granny alive!).

    I do wish the Rs would find a different script.

    –alopecia

    • Tony Lavely

      “I do wish the Rs would find a different script.”
      Good luck with that!

      • muselet

        I know. As Jayne Cobb once said, “If wishes were horses, we’d all be eatin’ steak.”

        –alopecia

  • katanahamon

    Getting..very..angry… Yes, Mark Meadows and Jim Jordan have made a legal complaint against Cohen for “lying to Congress.” Why can’t they be punished for this once again ridiculously partisan stunt designed to malign, obfuscate, and prop up not only the criminal Rump The Chump but the failing Republican Party??

  • Draxiar

    I’m just accepting that a recession is coming. It’s been whispered and rumored about and the stage has been set for it to happen. I know, I sound like a doomsday prepper…sorry. With all of the hinky shit that trump is doing to the economy and worldwide trade and the “fiscally responsible” GOP doing nothing to hinder any of it- it’s going to happen. Reduce your debt as much as possible folks.

    • katanahamon

      It’s worse than that I’m sure..we will be lucky if there isn’t a world wide depression. Rump the Chump’s tax cuts here for the wealthy and the ruination of the farming industry, coupled with the financial time bomb of tariffs could easily set the stage for financial collapse. You know, the usual, expected result of any modern day Republican Administration.

      • Draxiar

        I’m an optimist so a say “recession”. The chance that a worldwide depression could happen is certainly on the table.