About a decade ago, then-candidate Donald Trump appeared eager to convince voters that he’d deliver extraordinary economic results. After several decades in which the United States averaged roughly 3% annual growth, the Republican routinely promised “4% annual economic growth.”
During his first year in the White House, the president went even further, declaring, “I see no reason why we don’t go to 4%, 5% and even 6%.”
This was unwise. GDP growth in the U.S. had only reached 6% once in the previous half-century, and that was because of a dramatic one-time drop in interest rates in 1984. Trump had set the bar unrealistically high, and to the surprise of no one, he failed to reach his own stated standard: Even before the pandemic, annual economic growth did not top 3% during his first term. In fact, in 2017 and 2019, when the president tried to tell the public that the economy was the best it had ever been, GDP growth was 2.5% and 2.6%, respectively.
Having failed to meet its unrealistic goals previously, Trump and his team have learned their lesson.
No, I’m just kidding. They’ve learned nothing and are making the exact same mistakes.
On Thursday morning, Commerce Secretary Howard Lutnick predicted that annual GDP growth in Trump’s second term is likely to reach 6% — a line he’s pushed more than once in recent weeks.
As a rule, officials recognize the importance of under-promising and over-delivering, especially after having already failed. But Lutnick went there anyway.
A day earlier, at a White House event, his boss went considerably further.
Annual GDP growth, Trump said, “should be able to be 20% or 25%,” adding, “I don’t know why it can’t be.”
I realize that economic policy has never been this president’s strong suit, but never in recorded history has the United States ever seen 25% annual growth. In 1942, when domestic production roared at the start of World War II, GDP growth reached nearly 19% — and we haven’t reached double digits since, even during economic boom times.
We wouldn’t even want to see growth that robust, since it would invariably lead to breathtaking levels of inflation.
As Trump really ought to understand, the numbers he casually threw around are not going to happen — and should not happen.
Just as importantly, as a political matter, he has a reason not to raise expectations like this. If, for example, the U.S. had 3% GDP growth every year during his second term, that would be evidence of a healthy economy. But according to Trump and his team, it would also deserve to be seen as a disappointment, since Lutnick is pointing to 6% growth, while the president himself pitches 20% to 25% growth.
There is such a thing as expectation management. These guys are flunking it in embarrassing fashion.
The post Raising the economic bar far too high, Trump and his team set themselves up for failure appeared first on MS NOW.
This article was originally published on ms.now
