Since 2017, the real economic growth rate for the economy has been falling. It has stayed between the 2.2-2.8% range which is below the target of 3.3% most economists believe is good. The White House said in July "it expected the economy would grow by 3.2% this year." However, most private sector economists believe that the real figure will be around 2.2% and even fall to 1.9% in 2020. In order to reach the goal set by the White House, Trump urged for the lower of interest rate--to even negative rates--to spur the economy. The Federal Reserve chairman, Jerome Powell, believes there is no need for this change and believes the central bank will "fall in line". Although slower growth can seem troublesome at face value, I believe were are in the downside of a business cycle and the oncoming recession is eminent. All policy makers can do is try to lessen the impact of it. Also continuing trade uncertainty with China will only make things worse and lead to slower growth.
https://www.wsj.com/articles/economists-dont-see-path-to-3-growth-in-2019-11568296800
Any thoughts as to how we can achieve some growth? I would like to see more investment into the transportation and medical sectors, but otherwise I am not so sure.
ReplyDeleteEconomic growth in the United States has often been driven by consumer spending and investment. Perhaps lowering tax rates could leave consumers with more disposable income and businesses with more assets that will boost spending and investment.
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