After campaigning as a businessman who would usher in a new golden age of growth in America, US President Donald Trump’s economic track record in 2017 proved disappointing. Despite large tax cuts and little standing in the way of Trump’s deregulatory agenda, the US economy has performed no better under his administration than under the last.
More than one year into his second administration, Donald Trump is still promising a “golden age” that would include rapid economic growth. This time, though, his team is being a bit more circumspect about the actual figures.
Looking back, economic growth in 2018 turned out to be quite high (close to 3%) – partly owing to tax cuts favoring the wealthy that became law in December 2017 – but it fell back to 2.3% in 2019. Then came COVID-19, which ensured that 2020 would be a growth disaster. But even excluding that year, the annual average growth rate for the first three years of the first Trump administration was just 2.5%, only slightly higher than the last three years of the Obama administration (2.3%). Then-Treasury Secretary Steven Mnuchin’s predictions for headline GDP growth proved wide of the mark.
To be fair, until COVID hit, unemployment remained low and poverty declined – a continuation of trends established toward the end of the second Obama administration. But wealth inequality continued to grow, very much helped by those tax cuts, and the budget deficit and associated government debt increased significantly under the first Trump administration.
That brings us back to 2026. The first Trump administration’s financial deregulation agenda proved to be relatively modest. But with its popular support flagging, there are strong indications that the second Trump administration will push hard to deregulate finance while encouraging the expansion of stablecoins and other cryptocurrencies, and urging banks to take on more risk relative to their capital buffers. That means headline growth may pick up slightly (also owing to the 2025 tax cuts). But it also means that systemic risks to the US economy will increase significantly.
– Simon Johnson, February 2026
US President Donald Trump and his Treasury Secretary, Steven Mnuchin, have promised an economic miracle. They argue that when the United States adopts their policies, it will consistently achieve annual economic growth above 3%, or even above 4%. After a year of being in charge, pushing hard on deregulation, and getting what it wanted in terms of tax cuts, how is the Trump team doing?
Looking back, economic growth in 2018 turned out to be quite high (close to 3%) – partly owing to tax cuts favoring the wealthy that became law in December 2017 – but it fell back to 2.3% in 2019. Then came COVID-19, which ensured that 2020 would be a growth disaster. But even excluding that year, the annual average growth rate for the first three years of the first Trump administration was just 2.5%, only slightly higher than the last three years of the Obama administration (2.3%). Then-Treasury Secretary Steven Mnuchin’s predictions for headline GDP growth proved wide of the mark.
To be fair, until COVID hit, unemployment remained low and poverty declined – a continuation of trends established toward the end of the second Obama administration. But wealth inequality continued to grow, very much helped by those tax cuts, and the budget deficit and associated government debt increased significantly under the first Trump administration.
That brings us back to 2026. The first Trump administration’s financial deregulation agenda proved to be relatively modest. But with its popular support flagging, there are strong indications that the second Trump administration will push hard to deregulate finance while encouraging the expansion of stablecoins and other cryptocurrencies, and urging banks to take on more risk relative to their capital buffers. That means headline growth may pick up slightly (also owing to the 2025 tax cuts). But it also means that systemic risks to the US economy will increase significantly.
– Simon Johnson, February 2026US President Donald Trump and his Treasury Secretary, Steven Mnuchin, have promised an economic miracle. They argue that when the United States adopts their policies, it will consistently achieve annual economic growth above 3%, or even above 4%. After a year of being in charge, pushing hard on deregulation, and getting what it wanted in terms of tax cuts, how is the Trump team doing?