The White House Is Out With Its Annual Economic Report
Support for NPR and the following message. Come from gusto providing payroll benefits and HR services for small businesses. Gusto serves more than sixty thousand businesses nationwide with full service payroll HR, tools and health insurance at gusto dot com slash NPR. We're going to take the risk now of reporting on the future. You have to do that with care. You never get any first-hand information from there, but economists do make forecasts to which businesses respond. So it's important and the White House is doing its annual economic report which includes an optimistic forecast for economic growth more optimistic than some other forecasts Kevin Hassett is chairman of the president's council economic advisers and his on the phone. Good morning, sir. Good morning at great to be back when you forecast growth of something better than three percent annually instead of maybe to what are you seeing that other economists do not the same thing we saw last year. Steve I mean, so about this time last year, we put out an economic. That had a forecast we'd actually finalized in November before the tax cuts passed, and we model the number of policies that the President Trump President Trump team was going to Bush and found that the baseline growth forecast was about to to which we agreed with the Obama administration on. But that if all of the policies were pursued last year that we could get growth up to three point one and growth last year with three point one. It was a pretty good hit. And so actually that means that for the first two years of the Trump administration. Our forecast has been either exactly at or below the economic growth experienced in the year, which is the first time that's ever happened. So you're calling me rosy forecast. Gop just saying Rosie I called you optimistic. I have to say I congratulations on getting that number, right? But of course, as things like the Trump administration's tax cut extended gets more and more unpredictable overtime. The Trump administration for example forecast. The tax cut would pay for itself, which seemed false at the time and turned out to be to to be false should people. Take your economic estimate here as realistic and make plans based on it. Yeah. For sure in and again think about it that over the last two years things have come in pretty close to what we said. And I think that you were sort of jumping the gun a little bit to say that these tax cuts and really the whole plan because there's more than just taxes affecting growth lift revenues overtime, usually the models that give you long long run feedback. You know, take five ten years for the growth GDP to rise to the level where the revenues are back where they started. We're we're trillion dollar deficits. Are we going? We're going to get. Yeah. So so so think about it this way the that the current CBO forecast over the next ten years is the GDP is going to be about seven trillion dollars higher cumulatively, I think in part because of all the policy changes. And so the deficit is a trillion dollars higher. But I'm asking is that a trade that you would take so suppose the that you're a pessimist about the deficit, should you trade trillion dollar deficit for seven trillion dollars more in GDP? Would you trade it for having five million people get lifted off of food stamps for wage growth in the bottom Dessel north of six percent? And I think that the policies are really working to improve Americans live right to focus on the deficit of the log read. But I think that the policies we pursued our sound ones and the results are in the data. This is an interesting point of view. You will find Democrats who take this point of view, you will sometimes find Republicans who take this point of view. I think you're telling me not that the deficit is meaningless. But don't worry about it. It doesn't matter as much as some other things. No, I think he should have really worry about it. But I think that you know, again, when President Trump was elected, we were the highest corporate tax place on her. Earth. You know, when was the last time you saw new factory being built manufacturing jobs declined about two hundred thousand under President Obama and President Trump has come in. And then we've lifted manufacturing jobs are ready by about five hundred thousand in the fact factories are coming back and they're coming back. You know because of simple economics went oh one. Yeah, we're at attractive place to be again because the tax rates are back sort of in the middle of the pack for the world. Let's acknowledge the manufacturing growth under President Trump when you said manufacturing jobs went down under President Obama. What you mean is went down a lot at the beginning in the great recession, and then went back up again strongly in the last years of Obama's time. Isn't that? I'm not sure, but you're correct that if we exclude the great recession, then there was a uptrend for President Obama in the last four years that accelerated dramatically starting in two thousand seventeen I wanna ask you about some tragic news that has struck your profession in the last day. We've learned that. Alan Krueger who advised President Obama has died in the other party. But someone you knew. Do of course. And I've known her new Allen since graduate school. You know, my heart goes out to his family. It's just a tremendous loss for the profession. He was such a great guy, a brilliant economist model for all of us when I was chosen to be the C H air for President Trump. He gave me a call and had all sorts of really useful tips, and and stayed in touch after I got here. You know, he's the kind of person that didn't seek the limelight. But the limelight sought him because of his inmates down on a professional level. Did you agree with more than you disagreed about about how to do economics how to do forecasting? I think that and neither Eleanor I or professional forecasters, we work in different areas in the field or or he worked, but I find the looking back that the times when we disagreed tended to be because I was incorrect, and he was correct. He was just one of the greatest living economists. And and you know, I mean, it was really at times humbling to be in a room with him because he just had a way to see through the difficult issues that very few people have. Any did it with such Congeniality? You know, he would sort of say well, Kevin. Did you think about it this way? And of course, that meant that had gotten it really terribly wrong. And I just we're all going to miss them terribly. Well, Mr. has it thanks for taking the time and taking our questions. I really appreciate it. Yeah. Thanks for having. He is chairman of the White House council of economic advisers and the White House is putting out its economic forecast. NPR's Scott Horsely has been listening in with us NPR's chief economics correspondent, Scott. Good morning. Good morning. Steve. You also knew Krueger in dealt with him. Yes. He he had the job in Obama's administration that Kevin Hassett has now. And actually there was a poignant moment yesterday as Mr. Hassett was briefing a bunch of reporters about their forecast, we were sitting in the conference room with the council of economic advisers, and there's photos of all the past chairman hanging on the wall now and Kruger's along with all of his predecessors. And it was it was a poignant moment. Let's talk about the rest of what we heard from from from. Kevin Hassett there when you listen to that forecast of of a little better than three percent growth. What stands out to you one thing to keep in mind is that the the administration forecast is Suming some positive things, for example, that it infrastructure Bill gets passed that the president's individual tax cuts are made permanent all that sort of baked into their forecast on the positive side. They are also assuming that more people come off the sidelines and enter the workforce that businesses invest more in capital goods and that productivity they are certainly more optimistic than most independent. Forecasters are right now and even with those relatively rosy expectations. They are projecting trillion dollar deficits in each of the next four years. But as Mr. acid says they have nailed their forecast for the first two years the Trump administration. We'll see where they go from here is the concern that economists have not that we're heading directly for. Session, but the growth may be slowing down. That's right. And we've seen that deceleration already from sort of peak last spring it's slowed with each quarter right now we're at a round two percent or maybe even less than one percent in the current quarter. So what we're seeing is that deceleration when we last heard from Scott Horsely, he was NPR's White House. Correspondent now chief economics correspondent, Scott. Thanks so much enjoying the newbie. Thanks support for this podcast and the following message. Come from Comcast business having the nation's largest gig speed network was just the start. Now, they're providing gig fueled apps and solutions that exceed expectations and help businesses perform Comcast business beyond fast.