Opinion

Trump's Tax Cuts Boosting Economic Growth to 3.2 Percent

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Posted: May 03, 2019 12:01 AM
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Trump's Tax Cuts Boosting Economic Growth to 3.2 Percent

Source: AP Photo/Michael Conroy

WASHINGTON - America is going through a period of deep contradictions. The economy grew at a robust rate of 3.2 percent in the first three months of 2019. But a recent voter poll found that a majority of voters believe it’s mainly benefiting the people in power, not them.

The economy’s performance in the wake of President Trump’s income tax cuts has led to hefty job creation, wage increases, and all-time highs in the stock market.

“We’re knocking it out of the park,” Trump said last week. “We have great growth and also very, very low inflation. Our economy is doing great.”

But that’s not what many voters are feeling, according to a new Washington Post-ABC News poll.

“About 8 in 10 Democrats and more than 6 in 10 Independents say the country’s economic system gives an advantage to those already in power, while only a third of Republicans share that view,” the poll discovered.

“The survey finds broad dissatisfaction with the country’s economic and political systems. Overall, 60 percent of all voters say the country’s economic system mainly benefits those in power, while 72 percent say the same for the nation’s political structures,” the Post said.

Among registered voters, 42 percent of them say Trump’s handling of the economy, particularly, his tax cuts, make them far more likely to support his reelection. But 32 percent of them say they are less likely to back him.

Independents, however, give Trump positive marks on the economy by a 10-point margin.

But a whopping 78 percent of Republicans embraced his tax cuts wholeheartedly.

It’s a different story on illegal immigration where 42 percent of voters said the president’s handling of that issue made it less likely they would support him for a second term — while 34 percent said it was more likely they would.

Trump has struggled with the immigration issue in Congress where lawmakers have refused to give him the money he needs to build his wall along the border.

Last month he announced that he would seal off the entire southern border, only to back away from that threat a few days later.

Elsewhere, voters are narrowly divided over his efforts to raise trade tariffs on our major trading partners. Only 34 percent of voters said his handling of the issue made them more likely to support him in 2020, while 36 percent said it would make them less likely to support him for a second term.

“Overall, Trump faces a higher hurdle to re-election than his predecessors, with 54 percent of voters disapproving of his job performance and 52 percent saying they will definitely not support him,” the Post survey found.

That level of voter opposition is four points lower than it was in January during a highly unpopular government shutdown.

But in the end, economic analysts believe that Trump’s political prospects will depend on the future strength of the economy for the rest of this year and early next year.

For sometime the Federal Reserve, and other analysts, have been forecasting a slowing economy in the 2 percent range — not unlike what happened throughout much of the Obama presidency.

But the Commerce Department’s 3.2 percent economic growth rate in the first three months of this year isn’t going away anytime soon, writes the Post’s economic analyst, Heather Long.

“In some ways today’s economy feels like 1998 or 1999, with robust growth, low unemployment and meager inflation that shows few signs of spiking,” Long writes.

“Confidence in the economy is high, and the stock market, much like in the late 1990s, has been on a bullish ride led by technology stocks,” she says.

“More Americans appear to be feeling the gains, with 53 percent of consumers saying they have experienced an improvement in their finances in the past month, according to the University of Michigan Survey of Consumers that was released Friday, the highest average since 1999,” she writes.

“It looks like a Goldilocks scenario of strong growth and benign inflation is still happening, much like the 1990s,” adds Neil Dutta, the head of economics at Renaissance Macro Research.

All we need now to make this forecast a shining reality is for Trump to lighten up on his tariffs and his tweets. Are you listening, Mr. President?