So far, Donald Trump has passed only one significant piece of legislation: the 2017 tax cut. It was, to be fair, a pretty big deal: corporations, the principal beneficiaries, have already saved more than $150 billion, and over the course of a decade the tax cut will probably increase the budget deficit by more than $2 trillion.
But the tax cut was supposed to do more than just give stockholders more money — or at least that’s what its proponents claimed. It was also supposed to lead to many years of high economic growth, 3 percent or more at an annual rate.
Independent observers were skeptical, to say the least. They conceded that the tax cut might lead to a brief sugar high, because that’s what big deficits do. But any favorable effects on growth, they argued, would soon fade out. And they always insisted that it would take some time to assess the tax cut’s actual effects.
Nonetheless, when the economy grew pretty fast in the second quarter of last year, Trump and his supporters cried vindication, and ridiculed the critics.
But a bit of time has passed since then. The chart shows the U.S. economy’s growth rate by quarter since the beginning of 2018. The last number isn’t official; but there are a number of independent observers, including both Federal Reserve banks and private financial institutions, who produce “nowcasts” that estimate growth based on early data. At this point all of these nowcasts show slowing growth, and most put the first quarter at around 1.5 percent.