Today: 23.06.2018
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22.06.2018

Trump’s tax-cut growth gamble could backfire.

There’s disappointing news coming out for President Trump, and it has nothing to do with the Russians or the revelations by beautiful women. The US economy — the one and only thing that got Trump elected — isn’t doing as well as people thought just a month ago. And despite a massively dangerous gambit on...
Time: 23:04     Date: 19.02.2018
Last US Business News: Trump’s tax-cut growth gamble could backfire. NY Post 24 - US News

The US economy — the one and only thing that got Trump elected — isn’t doing as well as people thought just a month ago. And despite a massively dangerous gambit on cutting taxes, it isn’t doing a whole lot more than under the previous guy.

The Federal Reserve Bank of Atlanta has one of the most closely followed indicators of the economy’s health. Its so-called GDPNow gauge on Feb. 4 had the economy growing at a 5.4 percent annual rate during the first quarter of 2018.

Now that gauge is down to just a 3.2 percent annual gain. And the quarter still has another month and a half to go. So it’s possible that the GDP could be much lower when the first official number is released in late April.

The Atlanta Fed is now more in line with the Nowcast GDP that is produced by the New York Fed, which has the economy growing at 3.11 percent during the first quarter. The two Feds guesstimates, as I’ve written before, had conflicted badly in the past.

Both of those estimates, however, are higher than those of some economists on Wall Street. JPMorgan Chase, for instance, reduced its prediction to an annualized rate of 2.5 percent. It had been at 3 percent until a worse-than-expected inflation rate recently pushed the guess down.

Inflation is only another way of saying that the price of things is going up. And if stuff is more expensive, people can buy less of it, so economic growth suffers.

At the midpoint of the quarter, this is nothing more than a parlor game. But since many expect the tax cuts will lead to an economic surge, it’s a game worth playing.

If the tax cuts don’t generate enough revenue, then all sorts of bad things will happen. Government projections already say the tax changes will increase the $21 trillion federal debt by $1.5 trillion over the next decade.

But if growth slows, that figure will be low.

And if annual deficits and total debt increase above expectations, then interest rates will climb and inflation will rise. People will be spending more without buying anything extra. And companies might think twice about some of the lofty expansion dreams they envisioned before the cuts.

My solution was do not mess with tax laws until the economy was doing better. Instead, Washington probably could have gotten the same economic boost — or better — by simply letting Americans have more easy access to the riches that are locked in their retirement accounts.

If all the tax cuts achieve is economic growth of 2 percent to 3 percent, the whole effort was futile — especially as the dangers of higher deficits are still there.

Economic growth was 2.6 percent in the fourth quarter of 2017, and that was before the tax law overhaul. The Trump administration has said it will easily get growth above 3 percent.

That definitely remains to be seen.

Business

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Opinion

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The half-awake citizen may be unaware just how dexterously the arms of the Kochtopus have reached into every precinct of...
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Cynthia Nixon is proving she has what it takes to be a real New York pol — and can fudge numbers with the best of ’em....
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Will Gov. Cuomo’s appointees to the state parole board spring every last cop killer from prison? The board, 10 of whose...
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Mayor de Blasio’s educrats aren’t alone in trying to mask school failure: Turns out the state actually has a formal system...
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How we can reunite migrant kids with parents.
They’ve been arriving in New York City in the dead of night. Quietly placed in temporary foster care, hundreds so far,...

Living

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How to go fly fishing in NYC.
When Natasha Eng, 33, boards the subway after work, fishing rod in tow, she knows what you’re probably thinking: “I basically...
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Where Gayle takes Oprah to eat in NYC.
Gayle King was born in Tennessee, but thanks to her father’s job, spent first grade to sixth grade in Ankara, Turkey. From...
US Living News: Next fast food trend is probably coming from Latin America. NY Post 24 - US News
Next fast food trend is probably coming from Latin America.
The next big food franchise will come out of Latin America, experts have claimed, with a number of chains eyeing up global...
US Living News: Airline workers busted for turtle-smuggling operation. NY Post 24 - US News
Airline workers busted for turtle-smuggling operation.
Two China Eastern Airlines staffers could face jail time after unsuccessfully attempting to smuggle 45 spotted and box turtles...
US Living News: Bill Gates wants mosquitoes to screw each other to death. NY Post 24 - US News
Bill Gates wants mosquitoes to screw each other to death.
Microsoft founder Bill Gates is pouring $4 million into a project to create killer mosquitoes that destroy each other through...
US Living News: Mysterious ancient civilization left signs across vast desert. NY Post 24 - US News
Mysterious ancient civilization left signs across vast desert.
People don’t tend to spend days traveling through the desert if they can help it. Which could be why most people outside...
US Living News: Woman discovers her long-lost sister lives next door. NY Post 24 - US News
Woman discovers her long-lost sister lives next door.
A woman who spent seven years hunting for her long-lost sister discovered she was her next door neighbor – after spotting...
US Living News: Toxic algae blooms becoming more common across US. NY Post 24 - US News
Toxic algae blooms becoming more common across US.
SALEM, Ore. — The words blasted to cellphones around Salem, Oregon were ominous: “Civil emergency. prepare for action.”...

Business

Last US Business News: Goldman Sachs recommends GE suspend dividend. NY Post 24 - US News
Goldman Sachs recommends GE suspend dividend.
General Electric ended a bad week on an ugly note when Goldman Sachs recommended Friday that the Thomas Edison-founded company...
Last US Business News: Kraft interested in buying Campbell Soup. NY Post 24 - US News
Kraft interested in buying Campbell Soup.
There could soon be a line forming in front of Campbell’s HQ. Campbell Soup, which last month said it was reviewing all...
Last US Business News: Amazon workers ask Bezos to stop selling tech to law enforcement. NY Post 24 - US News
Amazon workers ask Bezos to stop selling tech to law enforcement.
There was another social activism uprising in tech land this week — and this one got in Jeff Bezos’ face. An undisclosed...
Last US Business News: CNN staffer who resigned over retracted Russia story named interim head of CBSNews.com. NY Post 24 - US News
CNN staffer who resigned over retracted Russia story named interim head of CBSNews.com.
One of the three CNN staffers who resigned in June 2017 over a retracted story about alleged collusion between Russia and...
Last US Business News: Netflix PR chief exits over insensitive remarks. NY Post 24 - US News
Netflix PR chief exits over insensitive remarks.
Netflix Chief Communications Officer Jonathan Friedland is leaving the company following a controversy over insensitive remarks....
Last US Business News: This is the most American-made car. NY Post 24 - US News
This is the most American-made car.
Years of auto shareholders change — with parts manufacturing and vehicle assembly scattered around the world — leave...
Last US Business News: Sale price for Weinstein Co. cut by $23 million. NY Post 24 - US News
Sale price for Weinstein Co. cut by $23 million.
The Weinstein Company has agreed to reduce its sale price to Lantern Capital by $23 million, as doubts have been raised about...
Last US Business News: Tesla’s workforce cut will hit solar operation hard. NY Post 24 - US News
Tesla’s workforce cut will hit solar operation hard.
Electric car maker Tesla’s move last week to cut 9 percent of its workforce will sharply downsize the residential solar...

Metro

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A Staten Island high school principal was busted for her alleged role in an auto insurance scam in Pennsylvania, a report...
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Top prosecutor says safe injection sites come at ‘expense of public safety’.
The city’s top drug prosecutor ripped City Hall’s plan to open safe injection sites in a letter she sent to state health...
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The son of former state Senate Majority Leader Dean Skelos threatened to have his dad block a $12 million contract to an...
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Chinatown residents rejoiced Friday as a long-closed route from their neighborhood to lower Manhattan finally reopened —...
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The alleged West Side bike-path terrorist told a Manhattan judge on Friday that “Islam is leading a war,” and said he...
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The NYPD’s top dog got cuddly with an adorable three-legged Shih Tzu to drum up support for abused animals Friday. Police...

Sport

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How to gauge the Under when it comes to Citi Field.
Back on Monday, we suggested Mets hitters would feel as if they were playing on the moon in Colorado. You saw the effect...
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Stitches and deGrom care. Do U?.
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Yankees show how dangerous they are — even when they lose.
ST. PETERSBURG, Fla. — If enough goes right, you can defeat these 2018 Yankees, as the Rays exemplified Friday night when...