President Trump made a lot of grandiose promises during his campaign, most of which he is struggling to fulfill, if he hasn’t abandoned them already. But now, another campaign trail vow -- that Trump would immediately jump-start economic growth -- has bitten the dust.
Trump repeatedly promised to bring the country’s economic growth rate back to 4, 5, 6 percent or higher. After taking office, he and his Treasury Secretary, Steve Mnuchin, tried to ratchet that back to 3 percent. But now two senior figures in the administration, Mnuchin and Commerce Secretary Wilbur Ross, have publicly admitted that 3 percent annual growth is at least two years off.
Mnuchin hinted at the low odds of the U.S. hitting the 3 percent mark last week at the Milken Global Institute Conference, saying that it was probably going to take until at least 2018 to see that kind of change.
Ross, on Tuesday, was more emphatic. In an interview, he told Reuters that reaching 3 percent growth “is certainly not achievable this year" and placed the blame on Congress. “The Congress has been slow-walking everything. We don't even have half the people in place.”
This is not exactly true -- many of the senior positions in the executive branch are vacant not because Congress won’t approve Trump’s nominees but because there are no nominees to approve. Trump has been among the slowest of presidents in modern history to staff his administration.
Looking at the numbers so far this year, it’s hard to argue with Ross’s assessment of the chances for hitting 3 percent in 2017. The economy posted a dismal 0.7 percent annualized growth rate in the first quarter of the year. Economists are generally predicting growth of something above 2 percent in the second quarter. That would require the second half of the year to show growth of well above 3 percent to hit an annual 3 percent target.
However, Ross insisted that once the full Trump agenda is in place, much higher growth rates will appear.
“I think between the change in regulatory attitudes which will make it easier to make big projects, and the new taxes, which will make the rates of return much better, the reduced regulatory environment, I think over time you will see increases in [capital expenditures] - and that in turn has a big multiplier effect through the economy,” he told the newswire.