JM Rieger @RiegerReport Video Editor, The Washington Post • [email protected] Aug. 22, 2019 2 min read

My latest for @thefix:

Trump is ramping up his economic double-talk to tamp down recession fears 

Trump has repeatedly called his economy the “greatest” in U.S. history.

In June, Trump called Obama’s economy “weak.”

As @byHeatherLong reported this week, Trump’s economy has closely mirrored or continued economic trends that began under Obama. 

Trump’s WH projected 3% annual GDP growth through his presidency.

It also said the 2017 tax cut would aid growth and sustain business investment.

GDP growth over the last 4 quarters is 2.2%.

Business investment is negative for first time since 2016. 

Trump said the 2017 tax cut would be “rocket fuel” for the economy.

Revised job numbers released Wednesday show the tax cuts had even less impact on the economy than initially thought. 

Last week, Trump said he had added over 6 million jobs to the economy since the 2016 election.

As @pbump notes, not only is this a misleading figure, but Trump is currently adding jobs to the economy at a slower rate than in 2016 or 2017. 

There is also increasing evidence that Trump’s own economic policies have likely undermined his stated policy goals of:

- Reducing the debt/defict
- Reducing the trade deficit
- Growing the economy 

Trump’s tax cut has grown the deficit and the trade deficit, as consumers spent more, including on imported products.

Trump said his tariffs would reduce the trade deficit.

Instead, the trade deficit has grown as exports grew and imports fell. 

For years, Trump told Obama:

- The dollar was “weak” and inflation was “rampant”
- The debt/deficit was too high
- The Fed should raise rates

Now, Trump has:

- Called for a weaker dollar
- Increased the debt/deficit
- Called on the Fed to lower rates 

Now, as most economist predict a recession by 2021, Trump is blaming the Federal Reserve for the potential downturn.

Despite previously calling on the Fed to raise rates under Obama, Trump now says the Fed raised its historically low rates too fast. 

Except Trump’s own budget projections, which forecast 3% annual GDP growth, made these predictions last year:

- Short term rates: 2.7%
- Long-term rates: 3.2%

Both rates are now below 2%, meaning monetary policy is even *looser* than Trump projected. 

H/t to @paulkrugman who noted this disparity between Trump’s rhetoric and White House budget projections earlier this week.

You can follow @RiegerReport.


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