OPINION | Thank Trump for the economy's 3 percent growth
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It seems like just yesterday that President TrumpDonald John TrumpSupreme Court comes to Trump's aid on immigration Trump is failing on trade policy Trump holds call with Netanyahu to discuss possible US-Israel defense treaty MORE’s detractors were ridiculing the White House forecast that 3 percent economic growth could be attained in the post-Great Recession America. So Trump has reason to smile that during his first full quarter-year in office, gross domestic product (GDP) growth was just revised upward to… 3 percent.

Yes, this is just a preliminary snapshot based only on three months, so I’m not trying to get carried away here. But more good news is that the GDP forecast for the third quarter of 2017 is now estimated at 3.4 percent, as the economy is clearly picking up speed. These 3 percent-plus growth rates are especially impressive given that the economy crawled forward at just 1.6 percent growth in President Obama’s last year in office.

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So instead of the economic engine pulling us forward at 16 miles an hour, we are now in a higher gear coasting at 30 miles an hour. Sure, Hurricane Harvey, which has flooded Texas and Louisiana, will put a dent on growth for a few months. But it won’t hold us back. The optimism that businesses and investors are feeling is also reflected in the stock market surge since election day. Wealth of American shareholders is up by $4 trillion since Election Day.

 

The economy is also growing in the right places. Government spending actually shrank slightly in the last quarter, so the all-important private sector economy grew even faster than 3 percent. Also, ‎the most vital lead indicator for growth is business spending and investing. That has grown sharply since the Trump election, and it follows a drought in business spending on computers, factories, technology and equipment.

If businesses aren’t growing and investing, jobs are stagnant and wages flatten out. Pay raises are rare when businesses are in the fetal position, as they have been for the last decade. Energy production, regulatory relief and a pro-business orientation of the Trump administration account for the higher growth so far.

If the Republicans can get some kind of tax cut passed this year and a repeal of ObamaCare, 3 percent growth can rev up to 4 percent and boy will that feel good. It's been more than 15 years since we’ve seen that kind of prosperity.

So the America-doubters and the never-Trumpers appear to be dead wrong. Slow 2 percent growth isn’t the upper bound pace of economic progress for the United States. The long-term growth path for America is closer to 3.3 percent, and in this technological age, there’s no reason we can’t grow even faster than that.

Trump needs to start sounding like Buzz Lightyear, pointing his finger to the skies and declaring, “To 4 percent growth and beyond! We can get there.”

Stephen Moore is the distinguished visiting fellow for the Project for Economic Growth at The Heritage Foundation and a senior economic analyst at CNN. He served as an economic advisor to Donald Trump’s 2016 presidential campaign. You can follow him on Twitter @StephenMoore.


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