<div dir="ltr"><p style="margin:0px 0px 24px;padding:0px;text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-size:16px;font-style:normal;font-variant:normal;font-weight:400;text-decoration:none;word-spacing:0px;white-space:normal;box-sizing:border-box;background-color:transparent">SAN FRANCISCO (Reuters) – The economic boost from U.S. President Donald Trump’s $1.5 trillion tax cut will probably fall well short of most analysts’ “overly optimistic” expectations, two economists wrote Monday in the San Francisco Federal Reserve Bank’s latest Economic Letter. </p><span style="text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-family:"Libre Franklin","Helvetica Neue",helvetica,arial,sans-serif;font-size:16px;font-style:normal;font-variant:normal;font-weight:400;text-decoration:none;word-spacing:0px;display:inline;white-space:normal;float:none;background-color:transparent">
</span><p style="margin:0px 0px 24px;padding:0px;text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-size:16px;font-style:normal;font-variant:normal;font-weight:400;text-decoration:none;word-spacing:0px;white-space:normal;box-sizing:border-box;background-color:transparent">Instead of the boost to GDP growth this year of about 1.3 percentage points estimated by the Congressional Budget Office and other forecasters, they wrote, “the true boost is more likely to be less than 1 percentage point,” with some studies pointing to as little as zero. </p><span style="text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-family:"Libre Franklin","Helvetica Neue",helvetica,arial,sans-serif;font-size:16px;font-style:normal;font-variant:normal;font-weight:400;text-decoration:none;word-spacing:0px;display:inline;white-space:normal;float:none;background-color:transparent">
</span><p style="margin:0px 0px 24px;padding:0px;text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-size:16px;font-style:normal;font-variant:normal;font-weight:400;text-decoration:none;word-spacing:0px;white-space:normal;box-sizing:border-box;background-color:transparent">That is because fiscal stimulus has a large effect on economic activity when unemployment is high and personal finances are constrained, but it delivers much less of a jolt when the economy is strong, they wrote.</p><p style="margin:0px 0px 24px;padding:0px;text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-size:16px;font-style:normal;font-variant:normal;font-weight:400;text-decoration:none;word-spacing:0px;white-space:normal;box-sizing:border-box;background-color:transparent">In June the U.S. unemployment rate rose slightly to 4 percent, much lower than most economist estimates of a sustainable rate, as businesses added many more jobs than expected and more job seekers entered the labor force.</p><p style="margin:0px 0px 24px;padding:0px;text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-size:16px;font-variant:normal;word-spacing:0px;white-space:normal;box-sizing:border-box;background-color:transparent"><span style="text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-family:"Libre Franklin","Helvetica Neue",helvetica,arial,sans-serif;font-size:16px;font-style:normal;font-variant:normal;font-weight:400;text-decoration:none;word-spacing:0px;display:inline;white-space:normal;float:none;background-color:transparent">
</span></p><p style="margin:0px 0px 24px;padding:0px;text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-size:16px;font-style:normal;font-variant:normal;font-weight:400;text-decoration:none;word-spacing:0px;white-space:normal;box-sizing:border-box;background-color:transparent">Governments typically increase deficits with spending and tax cuts when times are tough, not when an economic expansion is barreling toward becoming the longest running in U.S. history.</p><p style="margin:0px 0px 24px;padding:0px;text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-size:16px;font-variant:normal;word-spacing:0px;white-space:normal;box-sizing:border-box;background-color:transparent"><span style="text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-family:"Libre Franklin","Helvetica Neue",helvetica,arial,sans-serif;font-size:16px;font-style:normal;font-variant:normal;font-weight:400;text-decoration:none;word-spacing:0px;display:inline;white-space:normal;float:none;background-color:transparent">
</span></p><p style="margin:0px 0px 24px;padding:0px;text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-size:16px;font-style:normal;font-variant:normal;font-weight:400;text-decoration:none;word-spacing:0px;white-space:normal;box-sizing:border-box;background-color:transparent">Doing so raises concerns about the nation’s capacity to combat future downturns, particularly if it does not deliver outsized economic gains in the meantime, the report suggests.</p><p style="margin:0px 0px 24px;padding:0px;text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-size:16px;font-variant:normal;word-spacing:0px;white-space:normal;box-sizing:border-box;background-color:transparent"><span style="text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-family:"Libre Franklin","Helvetica Neue",helvetica,arial,sans-serif;font-size:16px;font-style:normal;font-variant:normal;font-weight:400;text-decoration:none;word-spacing:0px;display:inline;white-space:normal;float:none;background-color:transparent">
</span></p><p style="margin:0px 0px 24px;padding:0px;text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-size:16px;font-style:normal;font-variant:normal;font-weight:400;text-decoration:none;word-spacing:0px;white-space:normal;box-sizing:border-box;background-color:transparent">“Recent research finds that the effects of fiscal stimulus on overall economic activity are much smaller during expansions than during downturns,” wrote Tim Mahedy and Daniel Wilson, fomer and current San Francisco Fed economists, respectively.</p><p style="margin:0px 0px 24px;padding:0px;text-align:left;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-size:16px;font-variant:normal;word-spacing:0px;white-space:normal;box-sizing:border-box;background-color:transparent"><b></b><i></i><u></u><strike></strike><br></p><div style="margin:10px 0px;text-align:center;color:rgb(51,51,51);text-transform:none;text-indent:0px;letter-spacing:normal;font-size:16px;font-style:normal;font-variant:normal;font-weight:400;text-decoration:none;word-spacing:0px;white-space:normal;box-sizing:border-box;float:none;background-color:transparent"><ins class="gmail-adsbygoogle" style="background:rgb(238,238,238);width:336px;height:280px;text-decoration:none;display:inline-block;box-sizing:border-box"><ins id="gmail-aswift_2_expand" style="background:none;margin:0px;padding:0px;border:0px rgb(51,51,51);width:336px;height:280px;text-decoration:none;display:inline-table;box-sizing:border-box"><ins id="gmail-aswift_2_anchor" style="background:none;margin:0px;padding:0px;border:0px rgb(51,51,51);width:336px;height:280px;text-decoration:none;display:block;box-sizing:border-box"><b><br></b></ins></ins></ins>
</div><br clear="all"><br>-- <br><div class="gmail_signature"><div dir="ltr"><div>   <div style="width:auto;height:auto">   <div> <div><div><br></div></div></div></div></div><div><div><div><div><div><div><div><font size="2"><span style="font-size:10pt"><div><span style="font-size:13.33px">A society grows great when old men plant trees whose shade they know they shall never sit in. </span><br style="font-size:13.33px"><br style="font-size:13.33px"><span style="font-size:13.33px">-Greek proverb</span></div><div><br>
“Enlightenment is man’s emergence from his self-imposed immaturity. 
Immaturity is the inability to use one’s understanding without guidance 
from another. This immaturity is self- imposed when its cause lies not 
in lack of understanding, but in lack of resolve and courage to use it 
without guidance from another. Sapere Aude! ‘Have courage to use your 
own understand-ing!—that is the motto of enlightenment.<br>
<br>
--Immanuel Kant<br>
<br><br></div></span></font></div></div></div></div></div></div></div></div></div>
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