Then: "The U.S. properly worked for China's inclusion".
Now: "An era of folly began in the new century. Leaders of both political parties supported China's entry into the World Trade Organization".
I can't wait for the Wall Street Journal to admit that America's decline actually began under Reagan forty years ago, not twenty-five, because at this rate I'll be dead before they do.
The U.S. economy grew at a much greater-than-expected pace in the third quarter, boosted by strong consumer spending, a delayed report released Tuesday showed.
U.S. gross domestic product, a sum of all goods and services produced in the sprawling U.S. economy, expanded by 4.3% in the July-September period, the Commerce Department said in its initial reading of third-quarter growth. Economists polled by Dow Jones expect a gain of 3.2%. ...The personal consumption expenditures price index, the Fed’s primary inflation gauge, rose 2.8% during the period, and 2.9% for core which excludes food and energy. Both were above prior respective readings of 2.1% and 2.6% and remain well above the Fed’s 2% inflation gauge. Also, the chain-weighted price index, which accounts for changes in consumer behavior such as switching to less expensive products for pricier items, rose 3.8%, a full percentage point above the forecast. ...
... The last time real GDP hit 5 percent for the entire year was Ronald Reagan’s 1984, where the number was 5.6 percent for that whole year. ...
Here.
If Larry were completely honest he'd recognize that real GDP growth has been in steady decline in the entire post-war.
The percent change peaks are plain as day, unless you're an ideologue.
We've gone from 8.69% in 1950, to 7.23% in 1984, to 6.15 in 2021 (COVID panic spending), and the dozen or so routine percent change years above 5% between 1950 and 1984 when the economy was still holding its own have disappeared.
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| click to expand |
The Reagan Revolution didn't do one thing to stem the decline, the Trump Gimmickry even less. In fact, the Reagan Revolution made it worse.
The answer why is paradoxical.
The debt-based economy of the United States ran out of gas under Reagan because he cut the taxes which paid for that debt, too much and on the wrong people. It's still a debt-based economy, but we don't want to pay for it anymore.
This is the infantile cry of libertarianism.
We all think the growth of debt has been the problem when paying for that growth has been the problem. We threw a tantrum and decided to stop paying for it, and its growth naturally contracted, and along with it GDP, in self-defense so to speak.
Growth of TCMDO, the total universe of debt, which steadily climbed the ladder in the post-war, plunged after 1985, from percent change 15.36% to 11.11% in 2004 to 9.51% in 2020 (COVID panic spending).
Debt draws future prosperity into the present, but what you get if you don't pay for it sufficiently is less prosperity when you reach the future from which you borrowed.
And as you pay less, you then borrow even more less so to speak, and get even more less. Rinse and repeat.
Welcome to the future.
It's really that simple.
Taxes have been much too low on the rich, and for a long time, and reversing that is the sober reflection of an age which realizes it made a mistake, starting long before Reagan with JFK, the libertarian cad who bedded more women in the White House than the rest of them combined. His Revenue Act of 1964 passed under LBJ cut the top income tax bracket from 91% to 70%.
The question we have to ask ourselves now is, are we ready to give our system another try and tax everyone, but progressively, and practice fiscal and moral restraint for a change . . .
or are we going to say yes to the billionaires who were made by all this obscene excess and who want to impose an un-American system of feudalism with themselves at the top and the rest of us their humble serfs?
George Washington wouldn't kneel even in church.
I'm with that guy.
The only number that really matters
... GDP tells you how much resource-generating capacity you have by looking at how much you are doing right now. ...
And as you know if you read posts here labeled GDP, we aren't doing enough.
GDP today would be DOUBLE what it is if the compound annual growth rate of GDP from the Great Depression to 1984 had simply continued on its trajectory after 1984, but it didn't.
Meanwhile, the steady decline in capacity utilization in the post-war tells you why.
Reagan administration policy prescriptions were only temporarily successful at staving off the trend lower.
Among its biggest mistakes was lowering ordinary income tax rates because those punitive rates had forced the wealthy to invest their money in American productive capacity in order to get preferential long term capital gains tax rewards from those investments.
Instead like FOOLS we gave them low tax bills on ordinary income, and they promptly took the surplus gains and invested them in low labor cost foreign lands.
Middle classes were created abroad in the millions where there were none before, at the expense of ours here in America.
Ronald Reagan wanted us to believe that it's our money and we know best what to do with it.
WE DON'T.
We had a few dozen billionaires in the Reagan era. Now we have hundreds.
Growth of GDP, percent change, annual, rolled over after 1984, inaugurating a new period of lower trendline growth in the economy.
You're not wrong to feel poorer.
Just look at the trend lines for the data in this chart from before 1984 and after 1984. The change is glaring. The money which used to go into the economy to grow it has gone straight into the pockets of the rich.
Meanwhile Trump had one year in 2018 at 5.32% and he thinks he's God's gift to humanity, when Bush 43 did better in 2004-2006 at 6.64, 6.72, and 5.95.
Doddering old Joe Biden comes along and averages 8.22 for four years and what do Democrats do but throw him under the bus.
It's enough to make you scream.
The speech is here.
Unfortunately the numbers don't lie. Shortly after that speech, economic growth rolled over definitively. I think Reagan said what he said because serious people around him were telling him we were in big trouble (1982) and he didn't want to believe it. It was a denial of reality, similar to the denial of reality so typical today from Donald Trump.
Michael W. Green (@profplum99) describes in a recent essay in great detail many of the ways in which we are indeed poorer, especially people who have to live in New Jersey and work in New York, in his "My Life is a Lie" here.
The essay resonates mostly with people in the top 20%, which certainly doesn't include YT. But I found it very interesting, however, for how it starts off resting on the mistaken assumption that we have "healthy GDP growth". It is Green's unquestioned and fatal premise, no different than Reagan's or Trump's before him.
We do not have healthy GDP growth now, nor have we had it for a long time, at least not commensurate with a population which has grown by 106 million since 1984.
The compound annual growth rate for GDP from 1929 to 1984 was 6.869%, but through 2024 has fallen 26% to 5.079%.
"Well, that doesn't sound so bad", you say.
Well, the 5.079% rate has given us GDP of $29.3 trillion through 2024.
But at the 6.869% rate we would have GDP of $60.4 trillion, $31.1 trillion more than we do, more than twice as much again.
We have multiple new generations who expected the 1984 fairy tale who are now on the receiving end of 50% less than what might have been.
Solving this growth problem has been the number one aspiration of many on the right year in and year out, but no one has delivered on it. The current pack are not conservatives. They've given up. They are simply hyenas, feasting off the flesh of the wounded, of whom there are more than ever.
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| The roll over of GDPA CAGR in 1981 was retested in 1984 (black line) |
Today's third estimate for 2Q2025 real GDP came in 0.5 points hotter at 3.8% on increased consumer spending:
Real GDP was revised up 0.5 percentage point from the second estimate, primarily reflecting an upward revision to consumer spending.
The big picture, however, indicates that the compound annual growth rate of real GDP from this report comes in at only 2.50% per annum for the eight years since 2Q2017. The corresponding figure for the sixty years 1947-2007 is 3.45% per annum. Economic growth since the year of the Trump Tax Reform late in 2017 therefore undershoots that post-war rate by 27.5%.
And measured from 2007 instead of 2017, real GDP growth has been even worse. Over the eighteen years since 2Q2007, real GDP has grown at a compound annual rate of just 1.97%, almost 43% worse than the pre-2007 rate of 3.45%.
Lower economic growth since the Great Financial Crisis remains the great unsolved economic problem of our time.
People who say "Just wait for the Trump tax cuts of 2025 to kick in" don't get it. There's nothing broadly, fundamentally, permanently different coming down the pike from that legislation. It's a continuation of the 2017 legislation, plus some temporary sweeteners.
A serious country would care about all this, but that would not be us.
On the contrary, gold has risen despite continued dollar strength.
The enormous gains for gold in 2024 and 2025 are not explained by a round trip in the dollar index from 120 to 129 and back again. That's just a little side show in the bigger picture of dollar strength.
The dollar index has made steady progress out of the pit of despair at 85.46 in July 2011 under Barack Obama, the enemy of fossil fuels, to a place of relative strength today averaging above 120 in 2022 and 2023, 123 in 2024, and 125 in the first half of 2025.
Speaking of a weak dollar in this context is laughable.
Maybe the dollar is so strong again because the United States has become a net exporter of oil. The 1975 ban on oil exports was lifted in December 2015. Net imports of oil went negative for the first time since 1950 in 2020.
Gold is probably so strong in part because of increasing debt globally, which like rising prosperity helps drive demand for it as a hedge. Extreme poverty gripped half the world in 1950 but by 2020 it afflicts just 10%. Meanwhile gold production has nearly tripled over the period.
As a percentage of global GDP, global debt has gone from just above 100% of global GDP in 1980 to a whopping 235% of global GDP in 2024.
The real GDP report is out and it looks better than a month ago: +3.3% seasonally-adjusted annual rate for the second estimate for 2Q2025, instead of +3.0% in the first estimate.
But the big picture changes only microscopically.
From the second quarter of 2017, the year when Trump's tax reform became law on December 22nd, until now real GDP has grown at a compound annual rate of 2.466%, instead of 2.456% last month. For the seventy years before that, the compound annual rate of growth was 3.182%.
Trump's so-called pro-growth tax reform falls short of the previous seventy years this month by 22.5% vs. by 22.8% last month.
Now made permanent as of the Fourth of July, or so they say, the Trump tax reform is likely to continue to, shall we say, weigh on things.
The problem remains the lingering after effects of the Great Recession, the Great Financial Crisis, the Housing Bubble, whatever you want to call it.
The Trump tax reform of 2017 didn't do anything to address that meaningfully, just as Obama never addressed it meaningfully, nor Biden.
The rupture with the past occasioned by 2008 is the elephant in the living room, and the Uniparty just pretends it isn't there.
From 2Q2008 to 2Q2025, the compound annual rate of real GDP growth has been 1.995% vs. 1.990% last month, vs. 3.421% for the sixty-one years prior to that, starting in 2Q1947.
America is still 41.68% behind that this month vs. 41.8% behind that last month.
It's . . . depressing.
The real GDP report is out and it looks pretty good at 3% for the first estimate for 2Q2025, especially in comparison with the -0.5% result for 1Q.
If only it were so.
From the second quarter of 2017, the year when Trump's tax reform became law on December 22nd, until now real GDP has grown at a compound annual rate of just 2.456%. For the seventy years before that, the compound annual rate of growth was 3.182%.
Trump's so-called pro-growth tax reform fell short by almost 23%.
The problem remains the lingering after effects of the Great Recession, the Great Financial Crisis, the Housing Bubble, whatever you want to call it. The Trump tax reform of 2017 didn't really do anything to address it meaningfully, just as Obama didn't, and also Biden in his turn.
From 2Q2008 to 2Q2025, the compound annual rate of real GDP growth has been just 1.99% vs. 3.421% for the sixty-one years prior to that, starting in 2Q1947.
America remains 42% behind its old self.
That's why everyone is unhappy, but especially the young. They desperately feel the futility of the situation, encumbered as so many of them are with student loan debt for the degrees which are not translating into the key to the future.
That's the sad reality of where we are, and where we are likely to stay for the foreseeable future.
But as always, the first step is admitting you have a problem instead of trying to put lipstick on that pig.
... The new additional senior deduction and other changes in Trump’s “big beautiful bill” may reduce taxation of Social Security benefits by approximately $30 billion per year, estimates the Committee for a Responsible Federal Budget. ...
$30 billion is 0.10 percent of current GDP of $29,962.00 billion.
House Speaker Mike Johnson wants you to know this is jet fuel for the economy.
Real GDP has been 2.43% compound annual 1Q2017 through 1Q2025. And that includes all the obscene pandemic spending.
This isn't even close to the 2.8% Trump cheerleaders are promising, let alone the 3% The Speaker touts.
First-quarter gross domestic product (GDP) growth was revised lower Thursday in light of reduced consumer spending, surprising economists.
GDP contracted by 0.5 percent on an annualized basis, 0.3 percentage points lower than the last measurement from the Commerce Department.
Economists were expecting the number to stay the same at a 0.2 percent contraction. ...
More.
Average yields at Treasury Note auctions this week have been significantly lower than at the immediately preceding auctions, indicating there has been a flight to safety on souring economic growth expectations.
Trump may get his lower interest rates . . . the hard way, lol.
More.
Sounds like Howard Lutnick gobbledygook at the end there. Paragraph two speaks of an increase in imports. Paragraph three of a downward revision to imports.
Which is it lol?
Nominal 1Q2025 GDP clocks in at $29.962 trillion in the third estimate. SPX was at 5612 on Mar 31, yielding a crazy high stock market valuation of 187.
Does anybody ever talk about exports anymore? You know, from domestic production?
... In recent years, a cautious optimism had returned, as supply chain shocks from the pandemic pushed some companies to bring production back to the US.
But frequent changes and uncertainty around where Trump's tariff policy is headed has 'got people spooked,' Andrew Anagnost, CEO of Autodesk, told the outlet.
The company sells software used by manufacturers to design factories and improve processes.
'The current operating mode is just the death to long-term investment,' he said.
While construction projects that were already underway are still going ahead, he added, confusion about the future is stalling new work. ...
More.
Exports are a " + " when calculating GDP. Imports are a " - " when calculating it.
Exports' contribution to GDP in 1Q2025 is THE WORST ON RECORD.
No wonder GDP was negative. Outside the pandemic soaring imports had their worst negative impact on GDP on record in 1Q2025.
It's a terrible time to be introducing new huge taxes on imports needed by domestic manufacturers, but that's what Trump is doing.
No one wants to talk about this. Crickets pretty much everywhere. CNBC had Rosie on to discuss, but there was no article.
