WASHINGTON, March 20 — The White House yesterday predicted brisk US growth of about three per cent would continue for more than a decade if Congress enacts President Donald Trump’s economic agenda.
The rosy forecast runs counter to expectations that the world’s largest economy will slow considerably this year, a view shared by the non-partisan Congressional Budget Office and International Monetary Fund.
The projection by the White House’s Council of Economic Advisors presumes lawmakers will enact more tax cuts while overhauling the nation’s infrastructure, among other policies.
It comes against a backdrop of divided control of Congress and as Trump faces a broadening field of Democratic challengers ahead of next year’s presidential elections.
Reflecting the political season, the council’s annual report to the president branded as “socialism” new policy proposals gaining popularity among Democrats such as universal healthcare and a top marginal tax rate of 70 per cent.
Higher taxes to pay for socialized medical coverage would cut GDP growth by a stunning nine per cent as soon as 2022, or about US$7,000 (RM28,543) per person, the report warned.
The Federal Reserve yesterday began a two-day policy meeting and policymakers have signalled they will leave interest rates untouched amid signs the world’s largest economy will “step down” in 2019.
Top White House economist Kevin Hassett told reporters yesterday the growth seen in 2018 was not a “sugar high” induced by the sweeping Republican tax cuts enacted in December of the year before.
“Our view is that it’s not really a sugar high at all. We actually cut taxes to encourage people to build new factories.... This year we’re actually going to get the output from those factories,” he said.
A recession by 2020, the odds of which some analysts say are growing, is “certainly possible,” he said, adding that “it would be very unusual given the massive amount of capacity that’s being brought on line.” — AFP
