Uncertainty: The Reason the Economy Isn’t As Good As It Could Be

Donald Trump, like the real estate developer and TV host he was, calls everything the best and the greatest – and other adjectives I can’t come up with right now.  He says this about the economy.  The problem is that it isn’t true, but it could have been.  The 2017 tax reform act was a boost to the economy,¹ as were the cutbacks in regulation by the Trump administration and the end of the constant uncertainty as to what new regulation or interpretation or guidance the Obama administration might come up with next.  Because of these actions by people in the Trump administration, the economy started growing faster than under the Obama administration.

But, in spite of President Trump’s boasts and tweets, the economy hasn’t grown as much as it could have – because President Trump brought in his own brand of uncertainty.  In 2018, President Trump tweeted that “trade wars are good, and easy to win.”  The American economy doesn’t agree.  While we needed to do something about China’s unfair trade practices, President Trump’s approach of unilateral tariffs, plus China’s retaliation, resulted in higher costs and more uncertainty.  While China might have been hurt, we have been hurt, too.  Uncertainty is a drag on an economy, no matter what else you do.

As I said in the first paragraph, many things the Trump administration has done have helped the economy, especially getting rid of unnecessary regulations and avoiding uncertainty as to what new ones might be coming.  What is sad, however, is how much better the economy could be doing if we hadn’t had the all of the uncertainties that President Trump created with his tariff wars and constant threats of new ones.  The best thing for the economy would have been the Trump administration – without President Trump.
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¹ The tax reform parts of the Tax Cuts and Jobs Act of 2017 were good and necessary.  It was unfortunate, and we will pay the price in the future, that the Act and the 2017-18 Congress did not do something about spending so much more than we collect in taxes