This isn’t what a boom looks like

The New York Times

The U.S. economy “keeps performing worse than the experts have predicted,” said David Leonhardt. I saw this laid out clearly at an economics conference in Washington. When economists projected economic growth two years out, they were too optimistic in nine years out of 10. The Federal Reserve has repeatedly “overestimated how quickly the economy would grow,” only to revise the forecasts downward. If the original forecasts had been correct, the U.S. economy would be about 6 percent larger than it is today— that’s $1.3 trillion more in goods and services. Despite frequent predictions, the economy has not reached 3 percent annual growth since the financial

crisis ended in 2010. Why the stagnation? Americans are saving more and spending less, thanks to tax cuts favoring the wealthiest—who spend a smaller share of their income than the poor and middle-class. And there’s an “investment slump” as a lack of competition drives down incentives to invest in new projects. To address this, the U.S. needs infrastructure projects, stronger safety-net programs, more aggressive antitrust policies, and a more restrained Federal Reserve that stops overestimating growth and inflation. President Trump likes to take credit for the “booming economy.” But here’s the truth that so many experts seem to keep missing: There is no boom.