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Trump’s Economy to Fall Far Short of Lofty Goals

Cutting taxes is going to be a difficult task.Cutting taxes is going to be a difficult task.

Wall Street banks warn that president-elect Donald Trump might not turn the US economy into the robust and thriving American powerhouse that has been promised–at least not right away.

While Trump is promising to increase US gross domestic product to 5-6% from its current 2% level, Wall Street banks are forecasting that, at least in its first year, a Trump White House will fall short of its goal, Newsmax reported.

“JPMorgan Chase is predicting a 1.9% growth rate next year. Others are a bit more bullish: Wells Fargo predicts 2.1% growth and Goldman Sachs says it will grow at about 2.25%,” the New York Post reported.

Goldman, Bank of America, UBS and Credit Suisse all predict the S&P 500 will end the year at about 2,300—only 2.4% higher than its 2016 close and well below the 9.5% gain in 2016 and the 7% average gain.

“This American economic expansion has been like a healthy tortoise, ambling slowly but steadily down the road,” wrote David Kelly, chief global strategist at JPMorgan Asset Management. “There are signs the tortoise may pick up the pace in 2017.”

Peter Morici, economist at the University of Maryland, tells Newsmax TV that although Trump is much smarter than Barack Obama, it will take some time to undo all of the regulatory damage the outgoing command-in-chief has imposed on America during the last eight years.

As for the US economy itself, Morici predicts a slow grind. “This is not Ronald Reagan’s (president—1981-89) economy. Cutting taxes is going to be difficult because we are much more constrained thanks to the recent years of slow growth,” Morici said on “Newsmax Prime.”

“2017 is going to be much like 2016. We’re going to have slow economic growth because it’s going to take time for the Republicans to put their program in place and it’s going to take time to do things like unwind Obamacare. My feeling is the year where it hits the road and where we find that if Donald Trump is successful is 2018. It’s going to take most of next year to get us programmed in place. I’m optimistic that he can.”

 

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