What’s not to love about this amazing American economy?

Throughout the last two years and still going, Donald Trump’s critics have been slamming his tax plan as a giveaway to the rich and denouncing his prediction of 3 percent to 4 percent economic growth as a pipedream. The economy was thought to have a ceiling on growth at 2 percent because that was the best Barack Obama could deliver.

If the messiah couldn’t get anywhere near 3 percent to 4 percent growth, how could Trump? The critics haven’t relented even as the evidence is rolling in that the tax cuts are working and the economy is growing much faster than anyone, even some of the biggest advocates of the tax cut, had hoped. Consider the avalanche of good news.

{mosads}Last month, the National Federation of Independent Business optimism index hit a 40-year high. A third of businesses now say this is a good time to invest. Unemployment insurance claims hit a 40-year low this month. A Quinnipiac poll has found that 70 percent of Americans now rate the economy as “good or excellent,” the highest number that poll has recorded since it started asking the question 20 years ago.

Wages and salaries for workers rose by 3 percent in January, the highest bump in take home pay in nearly 20 years. The most recent forecast by the Federal Reserve Bank of Atlanta based on the latest economic data predicts 3.2 percent growth in the first quarter of 2018. This would mean that since Trump took office a little over a year ago, the economy has averaged 3 percent growth, which is almost double the 1.6 percent growth that Trump inherited from Obama in his final year.

By the latest count, about 4.2 million workers have received pay raises, bonuses, or benefit increases from more than 200 major employers. These benefits have put an estimated $4 billion into the wallets of mostly middle income workers. How much of this is directly attributable to the tax cut is not measurable. But what is undeniable at this stage is that investors and employers are loving what Trump is doing. These booms don’t happen by accident and I would argue this one is mostly attributable to an overall pro-business culture in this administration.

Some of Trump’s critics, many of whom warned that Trump would crash the economy, are now complaining of too much growth. This worry of an “overheating economy,” as Bloomberg News recently called it, is the ultimate backhanded compliment. I haven’t heard this concern in 30 years since the booming Reagan years. What a wonderful problem for an economy to have. Too many jobs. Salaries and the stock market rising too quickly. Businesses expanding and investing too rapidly.

As one of the senior economic advisers to Trump during the campaign, I can tell you that the overriding goal of the policy redesign was to help middle class workers, not rich people. So how is this all working out for the forgotten class of middle income Americans from those rustbelt states who didn’t see much of any benefits from the later Bush and Obama years and took a chance in voting for Trump?

In addition to the bonuses and pay raises that are rolling out, more than 80 percent of American workers are seeing the effects of the tax cut in their paychecks already. And no, for the vast majority of workers these aren’t $1.50 a week raises. Workers are reporting $50, $100 and $200 more in their paychecks.

The two biggest benefits to the middle class are the doubling of the standard deduction to $24,000 for a family and the $500 per child additional tax credit. Ironically, with few exceptions, the only people who are paying higher taxes are very rich people in very high tax states like California and New York.

Americans are going to start wondering where this lie came from that the middle class will pay more taxes under the Trump plan. It’s still very early in the Trump presidency. I still worry about things that could go wrong, such as a weakening of the dollar, a trade war, creeping inflation, and a runaway federal budget.

The $300 billion spending spree by Congress is a negative for the economy. And now is definitely not the time to be raising the gas tax on middle class families. But for now, the economy is firing on all cylinders. Maybe it’s time for us all to just sit back and enjoy this sudden burst of prosperity that is lifting all boats across the country.

Stephen Moore is a distinguished visiting fellow at the Heritage Foundation, a consultant at FreedomWorks, 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.

Tags Barack Obama Business Donald Trump economy Finance Jobs Labor taxes

The Hill has removed its comment section, as there are many other forums for readers to participate in the conversation. We invite you to join the discussion on Facebook and Twitter.

More Finance News

See All
See all Hill.TV See all Video

Most Popular

Load more


See all Video