Strong 2018 Q2 Economic Growth Unsustainable

Washington Post columnist Catherine Rampell uses Penn Wharton Budget Model’s analysis of tax reform to delve into the implications behind strong second quarter U.S. economic growth in The economy’s great. That doesn’t mean Trumponomics is. She argues that strong Q2 economic growth is unsustainable, attributing growth to anticipation of a trade war and to a fiscal “sugar high” stimulated by tax cuts and federal spending increases. She pulls from PWBM’s static and dynamic analysis of the effects of the TCJA on the budget and economy to comment on the brevity of gains from the recent tax cuts. PWBM projects that while these tax cuts provide a small boost to GDP in the near term, the increase diminishes over time.