Job growth in November came in 79,000 higher than economists had expected, something that has become a regular occurrence under President Trump, where the economy has repeatedly defied what the “experts” forecast.
Just how big that gap is becomes clear when you look at longer-term forecasts these same experts made.
Take that jobs number. According to the Bureau of Labor Statistics, there are now a total of 152.2 million jobs in the U.S. That’s an increase of 6.8 million since Trump took office. Backers of President Obama will say that during the same 35-month stretch of Obama’s last term in office, the economy created 7.7 million jobs, so Trump is actually doing worse.
That’s misleading, at best. The economy was still coming back from a deep recession, which is when job growth should be robust. (In truth, post-recession job growth under Obama was one of the worst on record since the Great Depression.)
What matters is where economists saw the economy heading when Trump took office.
The Congressional Budget Office provides the answer. At the start of 2017, it released its 10-year economic forecast, which the CBO always boasts is right in the meaty part of the consensus of economists.
When it made its forecast, which assumed that nothing would change in terms of tax, regulatory, spending or any other policies, the CBO figured that the number of jobs created between January 2017 and today would be 2 million.
So Trump is doing better than expected on jobs by 4.8 million.
The CBO also expected that the labor force participation rate (which compares people employed or looking for work to the working-age population) would decline during the first three years of the Trump presidency, dropping from 62.8% down to 62.6%.
Instead, it increased to 63.2%. And this increase came as the baby boom generation started heading into retirement.
How about unemployment? The CBO figured the unemployment rate would be 4.7% by now, and climbing. Instead, it’s now down to 3.5% – the lowest since December 1969.
Then there’s the fact that quarterly GDP growth has exceeded the CBO’s projection in every quarter after Q1 2017.
As we noted in this space, that means the economy is more than half a trillion dollars bigger than it was supposed to be.
So what’s the Democrats’ response to this? They’re claiming that massive tax hikes on companies, investors and savings will boost economic growth.
We are not kidding.
Here’s the New York Times reporting on Elizabeth Warren’s economic plan, which includes roughly $3 trillion in tax hikes (which isn’t nearly enough to pay for all her spending plans):
“The senator from Massachusetts, who is a leading candidate for the Democratic presidential nomination, contends that her plans to tax the rich and spend the revenue to lift the poor and the middle class would accelerate economic growth, not impede it. Other Democratic candidates are making similar claims about their tax-and-spend proposals. Some liberal economists go further and say that simply taxing the rich would help growth no matter what the government did with the money. “
Their argument, of course, is that the government would spend the money more productively than the private sector, so the more of your money they take, the better off you will be.
We hope whichever Democrat wins the nomination runs on this claim, since it will finally clarify where the Democratic party stands today.
— Written by John Merline
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Politically speaking, the next 11 months are going to be the wildest of your life.
Anyone with even a little intelligence, a meager knowledge of economic issues, and just a tad of intellectual honesty is truly amazed by this. Sadly, that seems to leave out a few 10s of millions of Americans.
Dems need no help from anyone to appear incoherent. They ARE incoherent, claiming still to be “liberal” while opposing every single truly liberal principle and institution that has made America great. “Incoherent” is a polite way of saying, “hypocritical, dishonest, and irredeemably corrupt.”
Where is Michael Rameriz
??????? Michael’s latest are right there on our home page.
The liberals all believe that the Keynesian theory is an economic model that works wherever it’s tried. They believe that there is a multiplier effect associated with the theory. They truly believe that you can tax an entity $1, run it through a huge bureaucracy, spend it on something that has no value and that $1 tax will create a $1.25 increase in GDP. Just ask Austin Goolsbee (Obama econ adviser). Supply Side stimulates the economy and the proof is that unemployment is lowest in 50 years and wages are growing at 3.1%. Just ask Art Laffer (Reagan econ advisor).
Democrats are nasty creatures: hate-mongering, race-baiting, morally depraved.
During the FDR years and afterward, when the Democrats had absolute majorities in both houses of Congress, the Republicans often responded to Democrats’ proposals by saying “we can do it cheaper.” Today, it appears the Democrats’ response to Republican successes is to claim that “we can do it bigger.” Plus ca change…
Tax our way to wealth! Yay! What an awesome plan.
Wait that isn’t right. Not awesome. Sounds like awesome.