Trump's Three Percent Solution

Hi all.  I hope you've had a splendid weekend. 

Cast your eyes on my latest article: an homage to President Trump's economic stewardship, and a plea for Republicans to support his efforts at tax reform.  The economy is really humming along, but we can do better, if only we get on board with the President's economic agenda.  Email, call, or pester your Congressman and Senators in person, if necessary.  Let's not miss this golden opportunity to Make the I.R.S. Great Again (so to speak)!

Trump's Three Percent Solution

On August 30^th the Commerce Department revised its estimate of economic growth in the second quarter – to an annualized rate of 3%. Economic growth has thus already hit a threshold promised by President Trump, but scoffed at by leftist economists and politicians, who assumed that Obama-era growth of around 2% was surely the best that America (a tired husk of a nation, in their eyes) could achieve. There is reason to believe, moreover, that the best is yet to come.

The “Trump bump” to economic growth and to the stock market has been pronounced – the S&P 500 is up about 15% since November 2016 – despite the fact that much of the Trump agenda has been stalled in Congress. Obamacare taxes and regulations have weighed on the nation's economy since 2010, and, thanks to John McCain's cantankerousness, the effort to repeal and replace Obamacare was narrowly defeated in July – for now. Neither has President Trump's promised $1 trillion infrastructure plan made any headway in Congress. True, Trump has appointed pro-growth, conservative judges to our nation's courts, and he has used his executive authority to fight over-regulation, but the real world effects of these steps are, so far, modest. This makes it all the more incredible that economic growth, job growth, and stock market appreciation have been so robust. It begs the question: why?

If there is one signal blessing that Donald Trump has bestowed on the U.S. economy, it is this: investors, business people, workers, and consumers now know, with absolute certainty that, whatever may happen in the months and years to come in terms of tax policy, infrastructure spending, budget cuts, or fiscal reforms, Hillary Clinton will not be at the helm. Thus, her version of crony capitalism, which would have gleefully embraced records levels of regulation, bureaucracy, and taxation in an attempt to manhandle America into state-managed prosperity, is now just the stuff of nightmares. Trump, therefore, has stopped the slide into torpid socialism that President Obama began. In this sense, Trump's economic achievements so far have been based more on what he hasn't done than on what he has. They have been based on Wall Street and Main Street's collective sigh of relief, now that the pall of Democratic economic mismanagement has been lifted.

Imagine, then, the scale of growth and opportunity that the U.S. could attain if, instead of merely allowing President Trump to tinker at the edges of economic policy, we allowed him and his capable team to heal some of the festering wounds that have beset our economy for years, if not decades. How many inefficiencies and how much waste could be eliminated in our health care system, if common sense reforms were finally undertaken, and real competition were introduced – how many new resources would thus be freed up to provide better health care to greater numbers of Americans? How many businesses would flourish, if modern infrastructure allowed them to communicate and transport their goods as efficiently as possible? How many Americans, whose jobs have been lost to countries like China and Mexico, might see their fortunes restored by a trade policy that insisted on renegotiating trade deals in U.S. interests, punishing companies that outsource jobs, while rewarding those that are loyal to America and to the American worker? These are all goals that President Trump could achieve, with the support of Congress and the American people.

As President Trump suggested in his recent speech in Missouri, a good starting point is tax reform. Perhaps nothing would jump-start economic growth more than reforming our broken system of federal taxation, often regarded as the most needlessly complicated in the world. President Trump has set four worthy goals for Congressmen and Senators drafting a tax plan: tax simplification and the elimination of loopholes; reducing the corporate tax rate from 35% to 15%; cutting middle class taxes; and encouraging corporations to repatriate the trillions of dollars in wealth that they are hiding overseas. The details will undoubtedly be the subject of much hand-wringing and tough negotiating, but, broadly speaking, President Trump's goals are shared by many Republicans and Democrats (if the latter are brave and honest enough to buck their obstructionist base). Thus, for the sake of our nation, we must make tax reform a reality.

Much as the media likes to focus on the Trump administration's real and imagined missteps, the booming economy is a sign that the vast potential of America is gradually being unleashed by President Trump. Already, he is Making America Wealthy Again. With just a little help from Congress and the people, he could truly make our economy soar.

3% growth, even 4% growth – nothing is impossible, in a country as dynamic as ours. Together, we can leave Obama's anemic growth rates in the dust.

Dr. Nicholas L. Waddy, an Associate Professor of History in the State University of New York, blogs at: www.waddyisright.com.