Economic Adviser to President Trump Kavin Hassett says the future of the U.S. market continues to look bright, marking a shift from the state of the economy just a few years ago.
“In 2016, economists were saying ‘hey, maybe there’s a new normal,” Hassett told WATE 6 On Your Side during a stop to Knoxville. “Maybe we’re stuck in one percent growth land forever. President Trump basically ran for office arguing that there’s an old normal lurking in the background that we could achieve if we could just have tax cuts, deregulation and smarter trade policy.”
Hassett advises President Trump on economic policy and puts together the annual economic report of the President. He spoke in Downtown Knoxville at the Knoxville Economics Forum before a crowd of 80 local economists and business professionals.
He said in the past 12 months of available GDP data, the country saw three percent GDP growth, but in what appears to be an improving economy, many middle-class families say they still do not feel the relief.
“Middle-class wages have been stagnant for a long time and our belief in the White House is that they’ve been stagnant because we had the highest corporate tax on earth and businesses were locating overseas instead of here in the U.S.” he said.
Hassett said that with less regulation and lower corporate tax, he expects more companies will bring business to the states, leading to more American jobs and likely better wages.
Another factor that can potentially benefit workers and add competition to the market is raising minimum wage at the state level.
“Each state sets its own minimum wage with an eye on maximizing the benefit and minimizing the harm. I think if a firm is worried that a neighboring state with a higher minimum wage and they might lose workers to that state, then it can compete by lifting its wage,” Hassett said. “I think it’s better to let the states do it, not forever but as a basic principle because what’s right for Mississippi might not be right for North Dakota or California.”
With a growing economy and consumer confidence, Hassett said it allows the Trump Administration to focus on one of the country’s biggest challenges: the national deficit.
“The president has taken a leadership role on this now,” Hassett said. “He’s instructed the cabinet agencies to come up with a budget that cuts their spending by five percent, and if we do cut that five percent spending, it’s going to mean tens of billions of dollars in savings, which will make a big jump in the right direction in terms of deficit reduction.”