Cross-posted from CEI.org. The short version: this week’s growth report is good news, but the long-term outlook is less rosy.
The Department of Commerce announced Friday morning the U.S. economy grew by 4.1 percent in the second quarter of 2018.
CEI Vice President for Strategy Iain Murray said:
“Today’s growth numbers are yet more proof that supply-side policies work. Freeing up labor and capital by reducing the burden of government regulation and taxation will lead to high growth, more opportunity, more innovation, and lower unemployment. This rising tide will lift all boats, so it is important both that these policies continue and no new policies, like trade barriers, contradict them.”
CEI Fellow Ryan Young said:
“Four percent economic growth is wonderful news. An economy can double in size in just 18 years at that pace. While President Trump deserves much of the criticism he gets for his economic policies, his slowing of regulatory growth and some short-term benefits from his income tax cut probably helped boost growth.
“The long-term outlook is less sanguine. The extra debt from the tax cut will have to be repaid, dampening growth. And as the economic effects from his tariffs begin to be felt, growth could noticeably slow as soon as this year. Most troubling are Trump’s rumblings about exercising more control over the Federal Reserve, which is supposed to be politically independent. If there is anything economists across the political spectrum hold sacred, it is the price system. Politicians toy with it at our peril, as Herbert Hoover and Richard Nixon found out.
“If President Trump restrains his impulses, the near future will be as bright as today’s report. If not, rough economic times are ahead.”
- Iain Murray: More Evidence of Growth in February Job Figures
- Iain Murray: CEI Comments on February Jobs Report Numbers, Cautions Against Restrictive Trade Policy
- Ryan Young: CEI Warns Trump China Tariffs Will Backfire
- Ryan Young: Related analysis: Will Trump’s Tariffs Kill Free Markets?