The International Monetary Fund on Tuesday again lifted its estimate for U.S. economic growth for this year and next, even as the international agency warned that tax cuts will just bring a momentary jolt to the world’s biggest economy.
In its world economic outlook, the IMF lifted its U.S. growth estimate for 2018 to 2.9% and its 2019 estimate to 2.7%, both increases of two-tenths of a percentage point. It kept unchanged its world economic output estimate from January at 3.9% for both this year and next year.
The IMF pointed out the Tax Cuts and Jobs Act, the $1.5 trillion tax cut law, gives a temporary allowance for companies to fully expense investment. This is a strong incentive, the IMF finds, for companies to push along investment projects.
That, in turn, should lift employment, which should increase consumption and also prices — which means the Federal Reserve will also lift interest rates more aggressively.
Every democrat voted against the new tax law, every one.
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