For the last seven years, the U.S. economy has plugged along at a meager two percent growth rate. When that rate is compared to India’s and China’s economic growth, the U.S. is not even in the ball game. India and China’s economic growth rate is in the six to eight percent category. But the Trump administration thinks maintaining a 2.3 percent rate is good news. But something isn’t adding up, according to some economists. The unemployment rate in the U.S. is 3.9 percent, so more Americans are working, but the GDP output is not increasing. Trump wants a three percent growth rate, and according to investor Warren Buffett, he may already have his three percent economic growth rate.
Mr. Buffet said the economy grew by 2.9 percent in the fourth quarter of 2017. And he thinks U.S. economic growth now equals or surpasses that growth. But Buffett also said there is no way to tell what the growth percentage is, according to a Reuters article. But the president’s tax cut should help increase economic growth, according to Buffett.
The current 2.3 growth rate that the Commerce Department released last week is not what Trump was expecting. But the president believes his $1.5 trillion income tax package will do the trick once people start spending the money they are getting back from the government. That sounds like it could work if consumers spend the money instead of saving it. But Buffet feels comfortable talking about positive growth even though Trump is on the verge of starting a trade war that could negatively impact U.S. economic growth.