According to one analyst, it seems it might be more about oil prices than tax breaks …
The investment boom that began in 2016 is fading fast, quashing the never-realistic hopes of Republicans that the corporate tax cut had permanently transformed the economy for the better.
There’s good reason to believe that the tax cut had almost no impact on business investment. Rather, it was strong demand, especially for oil, that encouraged businesses to expand capacity. Now investment is softening along with aggregate demand.
Who knew?
A year ago, Republicans were predicting that their big tax cut for businesses would create a virtuous cycle of higher fixed investment, leading to higher growth rates lasting for years.
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Now, hopes that the investment boom would continue into 2019 are in tatters, victim to four factors that are dragging on the economy: reduced fiscal stimulus (including the shutdown), a weakening global economy, the uncertainty of Donald Trump’s trade policy and soft oil prices.
You mean the Repubs were wrong on the economy? Who’d a thunk it?
The U.S. economy needs a higher rate of productivity if we want living standards to improve. The tax cut didn’t change the weak trend in business investment. Maybe it’s time to invest more public money into transportation, alternative energy, education and health care to increase the nation’s capital stock and boost our growth rate.
As the Repubs scatter like roaches when you turn the lights on.