By most accounts, GDP is one of the best measures of economic growth in this country. President Donald Trump has been touting his positive economic record since he took office in January of 2017. However, former president Barack Obama and his supporters have claimed that the policies of the Obama administration are responsible. Who is right?
Let’s look at some history.
When Ronald Reagan won the presidency in 1980 and took over in 1981, our economy was in a major slowdown. GDP was -0.3% in 1980. Even though there was a minor jump in 1981 (GDP was +2.5%), this was followed by GDP at -1.8% in 1982. It was at this point that his tax reform and deregulation policies started to work.
1983 at +4.6%, 1984 at +7.2%, 1985 at +4.2%, 1986 at +3.5%, 1987 at +3.5% and 1988 at +4.2%.
When George W. Bush won the presidency in 2000 and took over in 2001, there was a minor slowdown. GDP was only +1.0% in 2001 and +1.7% in 2002. It was at this point that his tax reform and deregulation policies started to work.
2003 at +2.9%, 2004 at +3.8%, 2005 at +3.5%, 2006 at +2.9%.
We all know what started in 2007 and culminated in 2008-2009. The “Great Recession”. In 2007 GDP had slowed to +1.9%, 2008 was -0.1% and 2009 was -2.5%. Arguably this was the worst economic slowdown in this country since the 1930’s. Enter Barack Obama. His administration instituted tax increases and increased regulations. Let’s look at the recovery. 2010 at +2.5%, 2011 at +1.6%, 2012 at +2.2%, 2013 at +1.8%, 2014 at +2.5%, 2015 at +2.9% and 2016 at +1.6%.
Enter Donald Trump. His administration quickly institutes tax reform and reduces or eliminates many of the regulations put in place by the previous administration. What’s the impact? In 2017, GDP rose to 2.5%. The Obama administration had only 1 year out 8 that exceeded this number. With the 2nd quarter of 2018 at 4.2% GDP and the 3rd quarter expected to be even higher, 2018 is on its way toward 3.5%-3.9% growth for the year.
The numbers don’t lie but I will let you decide for yourself who’s responsible for the growth over the past 18 months.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
“U.S.: Real GDP Growth by Quarter 2011-2018.” Statista,