By April 2018, the Tax Cut and Jobs Act and the Bipartisan Budget Act of 2018 had been put into law. The CBO projected a bump in GDP growth, relative to counterfactual. (According to the CBO, the TCJA alone should have pushed output 0.6 percentage points above baseline in 2019.) However, the actual record has been fairly plodding, as shown in the below figure.
Figure 1: Reported GDP (dark blue), Macroeconomic Advisers nowcasts of 10/22 (light blue), CBO projection of April 2018 (dark red), and Trump 4% prediction starting from 2018Q1, all in billions of Ch.2012$, SAAR, on log scale. Trump administration shaded orange. Source: BEA 2012Q2 3rd release, Macroeconomic Advisers, CBO, and author’s calculations.
Note that Trump’s December 2017 prediction:
I think [GDP growth] could go to 4, 5, and maybe even 6%, ultimately.
Did not come to pass, as the trajectory is below the light red line of 4% (forget 5%). And in fact realized output was below the CBO current law projection (dark red line).
There are several possible explanations for this outcome: (1) the counterfactual no-stimulus trajectory was worse than projected; (2) the multipliers associated with TCJA and the BBA were smaller than anticipated, perhaps due to the fact that output was already close or above potential GDP; (3) GDP, while stimulated by tax cuts and spending increases, was depressed by economic policy uncertainty both at home and abroad; or (4) combinations of all of the above.