U.S. Economy Grows at Faster Than Expected 3.2% in First Quarter

0% interest rates, like Obama had?

 

Why would you consider the government taking more of the nations GDP a good thing? The goal should be grow the economy faster than the government and government taking LESS of GDP each year.

 

In the 90's, and prior to the Taxpayer Relief Act of 1997, the private sector had already taken over the economy thus, allowing government to cut spending, and/or spend below baseline budgeting.

GDP Annual and 1996 Quarterly Growth rates;

1992; 3.5%
1993; 2.8%
1994; 4.0%
1995; 2.7%
1996; 3.8%
1996 Q1; 2.6%
1996 Q2; 6.8%
1996 Q3; 5.1%
1996 Q4; 3.5%

Taxpayer Relief Act of 1997- enacted August 5, 1997
New $400 Child tax credit, and several other credits/benefits/incentives effective tax year 1998
New capital gains rates/exemptions....several new rules "phased in" as of May 1997
http://congressionalresearch.com/97-854/document.php



1997; 4.4%
1998; 4.5%
1999; 4.8%
2000; 4.1%

CONCLUSION: The Taxpayer Relief Act of 1997 increased the GDP growth rate by no more than 1%, thus, "arguably", from 3.5% to 4.5%

WHEREAS Trump's tax cuts and additional DEFICIT SPENDING increased the annual GDP growth rate from Obama's 1.6% to 2.9%.

QUESTION: Back in 1997, was there a need to stimulate the economy?
ANSWER; Not really
QUESTION: Back in Jan 2017, was there a need to stimulate the economy?
ANSWER; IMO, most definitely, due to fact the private sector had yet taken over the economy, however, I would have preferred a well-designed/paid-for $1.5 trillion infrastructure mega plan.

 

In the 90's, and prior to the Taxpayer Relief Act of 1997, the private sector had already taken over the economy thus, allowing government to cut spending, and/or spend below baseline budgeting.

GDP Annual and 1996 Quarterly Growth rates;

1992; 3.5%
1993; 2.8%
1994; 4.0%
1995; 2.7%
1996; 3.8%
1996 Q1; 2.6%
1996 Q2; 6.8%
1996 Q3; 5.1%
1996 Q4; 3.5%

Taxpayer Relief Act of 1997- enacted August 5, 1997
New $400 Child tax credit, and several other credits/benefits/incentives effective tax year 1998
New capital gains rates/exemptions....several new rules "phased in" as of May 1997
http://congressionalresearch.com/97-854/document.php



1997; 4.4%
1998; 4.5%
1999; 4.8%
2000; 4.1%

CONCLUSION: The Taxpayer Relief Act of 1997 increased the GDP growth rate by no more than 1%, thus, "arguably", from 3.5% to 4.5%

WHEREAS Trump's tax cuts and additional DEFICIT SPENDING increased the annual GDP growth rate from Obama's 1.6% to 2.9%.

QUESTION: Back in 1997, was there a need to stimulate the economy?
ANSWER; Not really
QUESTION: Back in Jan 2017, was there a need to stimulate the economy?
ANSWER; IMO, most definitely, due to fact the private sector had yet taken over the economy, however, I would have preferred a well-designed/paid-for $1.5 trillion infrastructure mega plan.

 

Spoiler: U.S. economy feels like the 1990s, but with more inequality, less readiness for a downturn

https://www.washingtonpost.com/busi...cf30147bdca_story.html?utm_term=.fea4c3ce3a43

 

Any reason you think that adding 10% to the economy doesn’t roughly mean adding 10% to the government? Seems to me that most government services necessarily scale with growth.

 

Not everyone knew of Trump's magic wand. The lost and confused Democrats certainly didn't, and still don't.

 

I often don't quite understand the grammatical structure of your posts.

What did I considered??????? or are you putting words in my mouth?

Your Quote: "The goal should be grow the economy faster than the government"

The goal should always be; To grow the economy, and make government more efficient and effective, PERIOD!

Your Quote: "government taking LESS of GDP each year"

and that's gibberish!

 

Growth is good, but I do have a worry at the back of my mind. We are now incurring trillion dollar deficits, and this is the first time we have ever had trillion dollar deficits in a good economy. We had then during the recession, but part of it was because revenue was so low and we were stimulus spending to just get the economy going. So the fact we are running stimulus-level deficits during this growing economy might explain the good growth. Economists are predicting that we are going to eventually have to spend 1 trillion dollars per year on just interest spending on the debt, and that is going to financially ruin us. I don't know why Trump proposed a 4.75 trillion dollar budget, that is probably intended to stimulate the economy even more with new debt.

 

The Best Tax Cut Economics can do?

 

Trump and Kudlow also want the Fed to lower interest rates, thus, stimulate the economy.

Why?

I'm guessing Trump's magic wand rechargeable batteries are leaking.

 

Obama was always guessing at how an economy works also. That's normal among leftits.

 

His "magic wand" is made out of 9 year trends. But he's doing his damnedest to screw it up.

Our RW buddies here seem to think that the President has some sort of control over the economy, as though the Oval Office has levers and buttons the the President works to get the economy going.

Uh, no. Yet they're the ones acting like they "understand" how the economy functions. *LOL*

 

We had a slow growth economy, and Obama kept submitting "Dead on Arrival" budgets, thus, we had an impasse.

 

Yes something unique to you for some reason.

You seemed to be complaining we have not had record revenues because revenues as a percent of GDP is lower.

Yes what are you missing? Then government can take a smaller percentage of GDP. Why should government spending as a percent of GDP remain constant with GDP growth?

Well they certainly not mutually exclusive.

I think it is quite clear to anyone who understands economics and government spending and taxation.

 

His own party turned down his budgets they were so bad and then they just stopped passing them at all. The Republicans brought back budgeting and spending cuts with sequester and austerity.

 

Yes rewally, Bill Clinton's tax rate hikes had slowed the growth of GDP from the strong recovery he inherited and along with it slowed the rate of tax revenue growth. Thank you Newt Gingrich and John Kasich and supply side economics. GDP growth and tax revenue growth shifted back into high gear and with their spending restraint and welfare reform the budget surpluses were produced.

 

TIMELINE, NOTES, and QUESTIONS;

1992 GDP Growth rate: 3.5%
FY1991 Revenues, (October 1, 1991 Through September 30, 1992); $1.05 trillion

Jan 20th, 1993; Clinton's inauguration
Aug 10th, 1993; Omnibus Budget Reconciliation Act of 1993
Jan 1st, 1993; Effective date of Clinton's tax hikes

1993 GDP Growth rate; 2.8%
FY1992 Revenues; $1.09 trillion......Revenue Growth rate; 4%

NOTE: FY2017 Revenue growth rate; 1.5%, versus Clinton's 4%
NOTE: 2017 GDP Growth rate; 2.2% versus Clinton's 2.8%

NOW, LET'S ASSUME CLINTON'S TAX HIKES HAVE LOWERED THE GDP GROWTH RATE FROM 3.5% TO 2.8%

1994 GDP Growth rate; 4.0%
FY1993 Revenues; $1.15 trillion....Revenue Growth Rate; 5.5%

NOTE: FY2018 Revenue growth rate; LESS THAN 1% versus Clinton's 5.5%
NOTE: 2018 GDP Growth rate; 2.9% versus Clinton's 4.0%

Jan 3rd, 1995; Republican controlled both chambers

NOTE: Clinton's tax hikes remained on the books until Bush became POTUS

QUESTION: Mr. know it all, what factor(s) increased the GDP Growth rate from 2.8% to 4.0% BEFORE Republicans gained control of both chambers?????????

 

Your quote: You seemed to be complaining we have not had record revenues because revenues as a percent of GDP is lower.

I'm not complaining, I'm ridiculing those who believe we have record revenues with facts and rationale.

 

It takes money to make money. Obama spent over 2 trillion and most say his direct stimulus had little or no effect. Trump's tax cut didn't cost a trillion. It created more jobs we would not have had. Reducing certain regulations save jobs and money. The economy is doing better than expected because this administration is doing what he said he would do. Trump's administration is performing. Congress is not.

Look at what we are spending on. It is mostly social programs. It would make not a difference if a democrat was in office, the deficit would still increase because we spend more than we take in. Trump is trying to negotiate trade with China, Japan, Mexico, Canada, India and all other countries we have imbalances with but it probably won't even pay the interest. The proposed budget is a combination of increases in social programs and military spending. We are also still fighting terrorists who wish death to America. It's expensive to protect the freedom we have.

You want to see a disaster? Elect any of the socialists that want to give the country away.

 

Obama loosened the jar lid.


I remember candidate Obama saying in an interview
if he could not fix the economy in one term, he would not deserve a second.
What happened?


Moi
Voted Obama '08

​

 

Obama's stimulus was 830 billion not 2 trillion, 303 billion of which wasn't spending, but tax cuts and it was spent over several years, so we didn't actually get that much per year. Most of the deficit actually came from the revenue less from the recession. When you spend money in the economy, that is going to create jobs and get the economy moving again, so it had to have some effect, but probably wasn't enough to quickly recover the economy.

Trump's tax cuts are 150 billion, and the rest of his deficit is 550 billion deficit inherited from Obama, and 300 billion added in extra spending under him. That is equivalent to a giant stimulus bill based on debt spending, which is probably really helping growth today, but is going to crush future generations in debt payments on interest.

 

What do think would have happened if Trump had $1T deficit and nearly zero % Fed interest rate that Obama had?

 

There is something not quite legit about this very high GDP it has a very foul odor to it!!The economy realistically just was not that good.How many retail stores and entire chains announced their demise in the quarter,thousands!!I smell a rat.

 

You brought up good points.


Four components of GDP;

Personal consumption
Government spending (goods and services)
Business investments
Net exports

"Consumer spending contributes 69% of total United States production. In 2018, that was $12.89 trillion. Note that the figures reported are real GDP."

https://www.thebalance.com/components-of-gdp-explanation-formula-and-chart-3306015

NOTE: if we reduce Federal transfer payments, (EARNED and UNEARNED), we will undoubtedly reduce personal consumption which is the main component of GDP. 2018 Federal transfer payments amounted to approx. $2.2 trillion.