Donald Trump is doing a great job as President of the United States; just ask him and he will tell you so. In fact you don’t have to go to the trouble of asking; just attend a MAGA rally or listen to any speech he gives. For some time now there has been a new truism in Washington. It says that anytime Trump mentions a number he is lying. With all that in mind let’s explore some numbers that came out in the last few days.
Last Friday the employment numbers came out. The glaring number was the paltry 20,000 net new jobs created. This was a huge drop from numbers posted since Obama got us out of George W. Bush’s Great Recession. It was also a huge drop from the numbers posted during the Trump administration. What happened? My theory is that a lot of Trump’s mistakes (which I contend will cause the coming Trump Recession) were the cause with one in particular – the Trump Shutdown 3.0. You can’t shut the government down for over a month coupled with its inherent uncertainty and expect the economy to keep humming like a well-tuned machine.
To put that jobs number in perspective I want you to consider 1999’s American births. In 1999 2,777,000 American babies were born. There are now over 231,000 Americans turning 20 years old each month in 2019 and they need a job. Based on the best 1998 numbers I could find I will round to 200,000 Americans retiring per month in 2019. Using projection and round numbers that means the economy must create at least 31,000 net new jobs each month just to keep pace.
Trump has declared himself to be a “Tariff guy” despite the fact that he obviously doesn’t understand how tariffs work or their repercussions. He keeps starting, “Easy to win” (his words, certainly not mine) trade wars in the hope that they will reduce or obliterate our trade deficit. Predictably it is not working. Last week the 2018 trade deficit numbers came out and they set a record for the history of the nation at $891.2 billion. This wasn’t the work of some left wing think tank; the numbers came from the Commerce Department.
The Trump Tower Tax Cut was supposed to give the economy a giant boost. Every credible economist and think tank predicted a drop off in revenue coming into the treasury. Trump and his apologists laughed at that analysis. They claimed that the tremendous economic growth would generate so much income that the taxes on it would more than offset the loss. Predictably it didn’t work out that way. Last week executive branch agencies reported that the revenue for the four month period from October 2018 through January 2019 dropped by $19 billion. Note that even that number doesn’t portray the full negative impact since tax overpayment was at an all-time high as corporations adjusted to the impact of the Trump Tower Tax Cut. Bottom line: it’s even worse than it seems. During those first four months of fiscal 2019 the deficit grew by 77 percent over the same period last fiscal year from $176 billion to $310 billion. Those are not projections or predictions; they are real numbers. Of course that only contributed to the already record national debt under Trump.
Yesterday Trump released his proposed budget for fiscal 2020. In all honesty any modern president’s budget is little more than a wish list and is dead on arrival on Capitol Hill. However it tells us a lot about Trump. Trump’s budget calls for $4.7 trillion while including major cuts to social safety net programs. It would guarantee a budget deficit of over $1 trillion. Remember every deficit is simply tacked on to the national debt. I lack the time and space to do a dissection of the budget but consider that it includes an additional $8.6 billion in border wall funding. Do Mexican citizens really pay $8.6 billion a year in American income taxes? Trump repeatedly said that Mexico would pay for the wall and still contends that they are doing so. At this point I’ll just say that this budget sets up another September showdown that could cause an October 1st government shutdown. How did that last one work out for America? For a partial answer look back to the second paragraph.
No individual economic statistic in itself is a fool proof measure of the economy, its direction or health. Even the methodology for calculating the numbers is fodder for discussion and debate. I can’t possibly cover that in a single article. People write books and teach courses on that topic. However continuing to do the wrong things and ignoring their repercussions is a sure path to a negative outcome.
Trump’s proclamation of greatness works well with his adoring crowds who desperately want to believe what they want to believe in spite of reality. It works reasonably well when confronted by a constrained press corps in a setting he and/or his minions control. When he used those lines in front of the United Nations he was greeted with laughter. They weren’t laughing with him.
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