By Dan Calabrese ——Bio and Archives--October 30, 2017
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The Commerce Department announced Friday that the U.S.’s third-quarter growth rate was 3%, following 3.1% in the second quarter. Two quarters don’t settle the argument, but the details inside the Department’s report should tilt the debate toward those who believe the Trump Administration’s proposed business-tax reforms could return the economy to higher growth. Business investment, a laggard in recent years, is gaining strength. It rose 6.7% in the second quarter and 3.9% in the third, with the decline most likely caused in part by the hurricanes. The 3% GDP growth despite the hurricanes surprised most economists. On Friday the White House Council of Economic Advisors released a new report detailing its case for dropping the U.S. corporate tax rate to 20%, which is that a globally competitive rate will reduce the cost of capital here, spur capital investment and produce growth in output and workers’ wages.If someone wants to argue this has nothing the do with Trump, the most convincing case is that Trump's major economic priorities haven't passed yet. Tax reform is on the agenda but it hasn't happened yet. ObamaCare repeal hasn't happened. If these two things are as important as we've always said they - and they are - then how can you claim Trump's policies are driving the growth? Trump's policies aren't really in place anymore.
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