American Economy Grows 3% in Third Quarter Despite Hurricanes
For as much as Ronald Reagan’s economic philosophy was maligned as “trickle down economics,” it was no different than that of another presidential tax cutter, John Kennedy, who defended those cuts with the justification that a “rising tide lifts all boats.”
Like Obama, President Reagan inherited a economy that was hardly ideal. While Obama inherited a financial crisis, Reagan inherited an economy plagued by massive inflation – and massive unemployment. Obama fought the recession with a massive stimulus bill, while Reagan did the same through massive tax and regulatory cuts.
Underpinning Obama’s poor economic record was a lack of economic growth itself. Obama was the first president since WWII to go through his entire administration without managing to reach 3% economic growth (or greater) for even a single year. Even FDR, who inherited the Great Depression, saw growth above 3% in some years.
To illustrate how important even a seemingly minuscule difference in economic growth is compounded over time, note that an economy growing at 2% a year will double in size every 35 years, while one growing at 3% will double every 23.5 years. In other words, it would take the economy growing at 2% an additional 11.5 years to catch up to the wealth of the one growing at 3%. And thanks to compounding, the gap will only exacerbate over time at an accelerating rate.
President Donald Trump promised that 4% economic growth would result from his tax reform plan, and he’s already on track to potentially close out his first year in office with a growth rate at over 3%.
According to Yahoo! Finance, “Gross domestic product increased at a 3.0 percent annual rate in the July-September period, also supported by strong business spending on equipment, the Commerce Department said on Friday. The economy grew at a 3.1 percent pace in the second quarter.”
Economists had predicted that the economy would only grow by 2.5% during the same quarter, but they were wrong. And we had 3% growth despite two major hurricanes striking the U.S.!
Imagine how much growth we would’ve seen without them!