2018 was a Boom Year for US Economy

By every measure 2018 was an extraordinary year for the US economy.  On virtually every front the US saw an improvements across the board.  This was spurred on by several factors:

• Tax reform that made the US go from one of the least competitive countries in the world to one of the most competitive among advanced countries.  The US had the highest tax rates of any industrialized country in the world.  Tax reform profoundly changed that.
• Aggressive regulatory reform across numerous agencies, particularly the EPA which had waged a war against entrepreneurs and family businesses.
•  A renewed commitment to property rights and the government supporting the rights of individuals to ownership and to enjoy the fruits of that.  This simple concept — a hallmark of a free market economy — had been under attack for years.

Many are describing the tax cuts as a short term boon for the economy — once the pump of cash “wears off,” the economy will “slow down,” we are told.  This idea stands in direct opposition of basic economics.  Kevin Price, host of the Price of Business show and Editor at Large of USA Business Radio said “The economy did not grow rapidly in 2018 simply because of an influx of capital due to the tax cuts (though that happened), but belief in investing in the US again was restored.  The lower tax rates makes the US a safer and more prosperous place to do business.  That will have a positive impact now and for years to come.”

The top Republican on the House Ways and Means Committee Kevin Brady (R-TX) was asked about 2018 and he offered the following assessment:

“Before tax reform, Democrats throughout Washington, D.C. told the American people that slow growth was the new normal for our economy. Thankfully, for workers across the country, they were wrong.

“Today’s report shows that in 2018, our economy grew at its strongest rate in 13 years – clocking in annually at 2.9 percent and rising 3.1 percent from the previous fourth quarter.  In addition to the fastest level of wage growth in over a decade, record low unemployment for folks from all walks of life, and soaring state revenues, business investment was also strong in this report, setting the stage for even faster wage growth for our workers.

“This is what happens when families have first say over their money and when our job creators are armed with a tax code that lets them compete and win here at home.  This tax code was built for the long term, and I still believe the best is yet to come.”

Real GDP increased at an annual rate of 2.6 percent, beating expectations, in the fourth quarter of 2018.  It obliterated the so called “new normal” under of Obama, where a “good year” was growth of around one percent.