With a year ago, the tax reform adopted at Association’s US President, Donald Trump high hopes. You should boost investment and create new Jobs. However, the Reform caused only a straw fire in the U.S. economy. The company took advantage of the tax gifts to give to their shareholders.
The biggest economic miracle of all time, Trump had promised, when he signed shortly before Christmas, on 23.12.2017 the “Tax Cuts and Jobs Act”. With tax relief of $ 1.5 trillion, he wanted to Stoke the economic recovery in the United States. “With more money in your pocket, the companies will invest, create Jobs, and your workers with bonuses showering”, dreamed the mighty man in the White house.
US economy runs on full speed
in fact, the biggest tax reform has accelerated since the 1980s, in the past few months, the economy. In the second quarter, the GDP grew by 4.2 percent in the third quarter, the increase was 3.5 percent. For 2018, the U.S. Central Bank expects a growth of 3.6 percent.
Also on the labour market, it is going splendidly. Unemployment has fallen to its lowest level in almost 50 years. The unemployment rate fell to 3.7 percent. On average were created per month 218.000 new Jobs. The hourly wages increased by more than three percent.
But how much of the tax reform, is controversial. In the first half of the year, the company invested vigorously. However, already in the third quarter, they held back. Torsten Slok, chief economist of Deutsche Bank, asks whether the effect of the tax cuts had already fizzled out.
share repurchases amounted to a record level
Although the companies have brought in billions from overseas, in particular the use of tax havens. The money flowed but hardly hoped-for investment, but in share repurchases. This climbed in recent quarters to record levels. Alone in the second quarter, the volume was proud of 437 billion dollars. 2018, the share is likely to buybacks for the first time in over a trillion dollars, writes the Gazette, “financial week”.
The S&P 500 companies – the 500 largest listed U.S. companies were in the third quarter, almost $ 200 billion in buybacks – as much as never. Already in the second quarter, a record value of 190,6 billion dollars had been reached.
profiteer of the tax reform are, therefore, not workers, but investors. In 2018 the US is expected to have issued to companies for the first time more money on share repurchases than for investment, for example, in the production.
Economists see this development with concern. Through the share buy-backs no economic would create more value, complained Philipp Immenkötter, Analyst at Flossbach von Storch Research Institute. “The companies only exchange cash against a higher share price.” In the short term, the rear-drive purchases the course, because the shares offer is scarce.
Everything is just a flash in the pan?
The economic boom under Trump is likely to be only a straw fire, criticise experts. In fact Trumps its predecessor, Barack Obama has triggered the upturn in the USA that hold up today. Driver the loose monetary policy of the Central Bank.
in the coming year is likely to weaken the growth momentum. The Fed predicts for 2019, only an increase in output of 2.3 percent. 2020 half of the US is expecting-operation of economists with the beginning of a recession. Even more pessimistic economic Nobel laureate Edmund Phelps. He prophesied for the next year, a recession in America. Recently, fanning the inverse interest rate curve, the fears of a recession.
Pimp my course
21.12.2018 09:04 PM
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source: boerse.ard.de
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