IMF, CBO Say Trump Won’t Even Manage 3% GDP Growth

The Trump budget banks on 3% economic growth for several years in a row. 3% is a step down from the 6, 5, and 4 percents he promised last year. But it’s still a step up from what the International Monetary Fund says the U.S. will get:

The IMF reduced its forecast for U.S. growth this year to 2.1 percent, from 2.3 percent in the fund’s April update to its world economic outlook. The Washington-based fund also cut its projection for U.S. growth next year to 2.1 percent, from 2.5 percent in April.

The world’s biggest economy will probably have a hard time hitting Trump’s target of 3 percent annual growth as it’s faced with problems ranging from an aging population to low productivity growth, and with a labor market already back at full employment, the fund said in its annual assessment of the U.S. economy released Tuesday [Andrew Mayeda, “IMF Cuts U.S. Outlook, Calls Trump’s Growth Target Unlikely,” Bloomberg, 2017.06.27].

IMF doesn’t count the Trump budget in its analysis but says any Trump stimulatory effect “is likely to be less than that projected in the budget and will take longer to materialize.”

The Congressional Budget Office agrees that the U.S. economy is going to grow at 1.9% a year for the next ten years:

CBO, "An Update to the Budget and Economic Outlook: June 2017," 2017.06.29.
CBO, “An Update to the Budget and Economic Outlook: June 2017,” 2017.06.29.

CBO’s economic forecast—which underlies its budget projections—indicates that, under current law, the economy will expand through 2018 at a pace that leads to further tightening of the labor market. Greater demand for workers will put downward pressure on the unemployment rate and upward pressure on the rate of labor force participation. As the amount of unused productive resources in the economy shrinks, inflation and interest rates are projected to rise. In the later part of the 10-year projection period, annual output growth is projected to average 1.9 percent, constrained by a relatively slow increase in the size of the nation’s labor force [CBO, “An Update to the Budget and Economic Outlook: June 2017,” 2017.06.29.].

The White House could study the IMF and CBO reports and work on passing some serious policy proposals to deal with the changing demographics and economic conditions underlying these somewhat ho-hum economic projections. But the White House is too busy exaggerating and misreading economic data for easy Tweets for that kind of grown-up policymaking.

16 Responses to IMF, CBO Say Trump Won’t Even Manage 3% GDP Growth

  1. Roger Elgersma

    proof that positive attitude does not get the job done. He needs to actually do something that will make a difference. Yes the economy is growing slower than when we had a president who thought everyone getting along together was a good thing.

  2. NOem laid claim to 9% growth, clear to see she and trump all look at the same clouds in their covfefe.

  3. Porter Lansing

    Guaranteed Income for All Americans … Economic growth is good enough at 2.1%-2.3% and if it improves, whoopee! This plan guarantees that all citizens or families have an income sufficient to live on, provided they meet certain conditions. Eligibility is typically determined by citizenship, a means test, and either availability for the labor market or a willingness to perform community services. The primary goal of a guaranteed minimum income is to reduce poverty.

  4. planning on 9% GDP growth is yet another gymnastic move by the GOP

  5. Trump’s E.P.A. will begin legal proceedings to revoke a waiver for California that was allowing the state to enforce the tougher tailpipe standards.

    Since the Great Recession of 2008, a controlled experiment is being played out at the state level pitting two theories of government against each other. Republican theory to revive growth (which Trump has embraced) was championed in Texas and Kansas by Rick Perry and Sam Brownback. It held that cutting taxes on the wealthy and cutting regulation on business would surely stimulate growth. The progressive Democratic theory of growth was championed in California and Oregon by Jerry Brown and Kate Brown (they are not related). There, taxes were raised on the wealthy to pay for more education and public infrastructure spending and regulations on pollution, privacy and assault weapons were strengthened.

    The results of the experiment are now in.
    California and Oregon grew 4.2% and 4.1% respectively in 2015. Texas and Kansas grew 1.8% and -0.8% respectively in the same year.

    Kansas tax cuts have been a huge windfall for the Koch Brothers whose company is based in Wichita, it has been a bust for the working class.

    “On the whole, Brownback’s policies modestly increased taxes for the poor and working class, who pay more in sales taxes than income taxes, while reducing taxes drastically for the rich.” In Kansas both the K-12 system and the Universities have undergone drastic cutbacks in spending, the state’s credit rating has been lowered and the state has experienced a net out migration of citizens.

  6. Interesting blog at Northern Valley Beacon as always. This one is about Americans leaving for the safety of Mexico! Huh? A million there and many more in Belize, Costa Rica and even to the north in Canada. According to a real estate man that has relocated there, business is doing very well there.

  7. His expectations were based on 1% growth from the repeal of Obamacare. 1% growth from tax cuts for the wealthy, that trickle down economic crap. His regulation cutting and repeal of Dodd Frank will spur the economy for investors. And the middle class……?

  8. trump based his expectations the same way he did with his steaks, Not very well done.

  9. Porter Lansing

    Clever food joke, Jerry. LOL

  10. @leslie, the EPA does the water quality on the reservations.

    If trump and the rest of the cult would keep their word about infrastructure, the country could have the growth projected and then some. Our water systems are crap and they are so overwhelmed at present, there are moratoriums on hook ups. We are in the middle of a drought and all Thune can blather about is how you can now graze on CRP, that is appreciated. Of course when you do not have the water, it is kind of a stretch to say how much good it actually does. There simply is no excuse for the complete lack of ideas and action on the part of the legislature and governor to do something positive instead of what we see now. Failures all. The worst part of it all is that we have come to expect this as the norm. After more than 40 years of neglect, we continue to see what happens when there is a need for action, natta. Thune needs to get off his arse and get some funding to expand the water pipelines and replace the outdated lines. Thune is the number 3 man in Washington and he acts like he is a back bencher, grow a pair dude.

    Porter, with trump, there is just so much material you can work with, the guy is a flakes flake, doesn’t even rate as a Snowflake.

  11. mike from iowa

    Cattle, like humans, will doe from lack of water long before they starve.

    As for Drumpf, I am already sick of all the winning. 6 months and nothing major accomplished-par for the Drumpf course but light years away from his promises.

  12. Porter Lansing

    ON RUSSIAN INTERFERENCE IN THE 2016 ELECTIONS: “I think it was Russia, and I think it could’ve been other people. … I agree, I think it was Russia, but I think it was probably other people or countries … Nobody really knows for sure.”
    That’s the kind of decisiveness USA voted for!! LOL ….. huh?

  13. Our petulant child wanders off again.

    Junior is behind bullet proof glass for a reason, and there he goes, after more blather and love for Russia. Something is not right about his boy.

  14. Porter Lansing

    AD/HD + Jet Lag + Adderall = goofy brain

  15. Hotel man with no room at his meeting. I dunno Porter, dude and crew act like they were all on the magic bus going to a Woodstock reunion.

  16. Porter Lansing

    Good one, Jerry