I guess those trillion$ Trump said were coming into the country have not come in, and consumer spending is higher only because everything costs so damn much more due to inflation.
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A191RL1Q225SBEA: 1Q1984-1Q2026 Trend |
But SPX is up 8.02% ytd.
WTI is up 84.01% ytd.
VGENX is up 20.88% ytd.
Investment grade corporate securities:
VWESX is down 1.54% ytd.
VFICX is down 0.65% ytd.
VFSTX is up 0.27% ytd.
US Treasury securities:
VUSUX is down 2.52% ytd.
VFIUX is down 1.05% ytd.
VFIRX is up 0.16% ytd.
Inflation:
CPI (CPIAUCSL) is up 3.77% year over year in April.
PCE (PCEPI) is up 3.49% yoy in March.
Nominal Broad Dollar Index:
April: 119.03
1Q2026: 119.01
2025: 122.75
5Y: 119.94
GDP, Compound Annual Growth Rate
5Y: 7.031% nominal, 2.775% real
The trend for the growth of the total universe of US debt, TCMDO or total credit market debt outstanding, rolled over after 1985, one year after GDP did.
TCMDO is the real money, almost $108 trillion at the end of 2025. In 1985 it was $9 trillion.
M2 was merely $22 trillion at the end of 2025.
TCMDO is the sum total of debt expansion throughout the sectors of the economy.
Historically, most people have experienced it this way.
You get a full time job, which itself was created by a business selling debt in the form of stocks and bonds in order to expand its operations and future profits, and you go buy a house, putting down $100k on a $500k property. The bank loans you the $400k through fractional reserve lending on a small portion of its reserves but secured by the house. That new money is created out of thin air but is actually represented by the "guaranteed" future income stream of your job for 30 years, because you're a smart, reliable guy who never misses a day of work. TCMDO expands, and expands some more each time this happens.
When the conditions disappear for full time job creation, the process slows down. You can see the decline in the growth of the economy in the decline of the growth of the debt. Yes, everything is still growing, but not as vigorously.
Full time as a percent of population peaked 26 years ago, in 2000, at 53.55%, but retested the 1975 low of 46.74% in 2010 and 2011 at 46.97%, back-to-back years in the Late Great Recession.
Housing strength persisted in the immediate post-Reagan period on the illusory basis of windfalls from massive ordinary income tax cuts combined with the demographic peaking of the 1957 Baby Boom turning 40 in 1997 driving demand, but the hollowing out of the economy had already begun with the move of 20,000 manufacturers abroad after the 1986 tax reform.
Early warning signs began flashing already during the Clinton era.
Clinton immediately raised taxes in 1993 after he promised not to raise them in 1992, began a long series of cuts to federal government employment, and gutted the US Navy.
Americans were already struggling at the time and ominously tapped housing equity to sustain their middle class standard of living. Owners' Equity in Real Estate averaged 70% 1982-1986 inclusive, but plunged ten points within a decade to 60% 1996-1999 inclusive.
Homes had become piggy banks, preparing the way for 1997, the year Clinton and the Republicans went further still and turned homes into mere commodities, which in turn prepared the way for the housing catastrophe of 2008. From 1997 a flood of 70,000 more manufacturers began moving out as globalization kicked into high gear and China gained admission to the WTO in 2001.
Almost no one today wants to say out loud how unpatriotic this whole business was.
Reagan tried to convince us that we know best what to do with our own money, and we promptly turned around and staked our fortunes on foreign investment, not domestic.
Libertarianism is a lie.
Today you will be hard-pressed to identify a major manufacturing concern with 100% of its operations in the US. Tesla is a standout (heavily subsidized by the federal government!), but other than that most of the businesses which remain patriotically committed to the American idea are pretty small beer compared with how it used to be.
The formerly domestic debt expansion was exported abroad, creating middle classes where none existed before, especially in East Asia, and doing so cost businesses A LOT less, the key attraction for them.
As a result, enormous profits accrued to the owners of capital while wage earners here struggled to maintain the American dream. Wealth inequality soared, and now our children are 40 before they buy their first home.
TCMDO grew at a compound annual rate of 8.355% 1945-1985, but at only 6.398% 1985-2025. The change from optimism to pessimism can be traced in the trend lines.
Continued growth of TCMDO at the former rate but after 1985 would have yielded TCMDO at the end of 2025 of $223 trillion, or 106% more "money" than we actually have.
$115 trillion is "missing", or at least something like that. We will never know for sure, but some of us can still imagine because we watched the great betrayal actually happen.
This is why I say socialism is the future, not because I want it or because I think it will work.
People are going to figure this out eventually, get angry, and do the wrong thing, just like we did during the Reagan administration.
Real GDP in 1Q2026 reached $24.175 trillion.
Had real GDP continued to grow at the pre-1984 rate to now, it would have been $35.273 trillion, 46% more than it is.
That's the difference between a compound annual growth rate from 1947 to 1984 at 3.585% continued to 2026 instead of at 2.657% since 1984 to now.
IDEAS HAVE CONSEQUENCES.
It's a long way down from 8.1% in 1Q1984 to 2.0% in 1Q2026.
GDPC1 compound annual growth rates:
Trump era to now 1Q2017-1Q2026: 2.476%
Mid-Reagan era to Trump 1Q1984-1Q2017: 2.707%
Post-war to Reagan 1Q1947-1Q1984: 3.585%
Trump underperforms the post-war by 31% . . . and Reagan by 9%. MAGA is purely aspirational.
Reagan to Trump underperformed the post-war by 24%.
The compound annual growth rate of real GDP from Reagan to now is 2.657%, underperforming the post-war by 26%.
This is why the kids don't have full-time jobs, kids of their own, and homes to raise them in.
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| trend for percent change for real dollars |
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| trend for percent change for the rate |
Ronald Reagan didn't make America great again, and neither has Trump.
The watershed tax changes throwing away the threat of high ordinary income taxation under Reagan in 1986 and Trump in 2018 have got to go.
The country needs genuinely domestic, long-term investment to bring back economic growth. Reward that with low tax incentives and penalize everything else.
Rich people OBVIOUSLY haven't demonstrated that they know best what to do with their own money, otherwise they would have done it already.
We watched helplessly year after year, especially after 2000, as one business after another moved its production abroad seeking lower labor and regulatory costs to make themselves rich, not us.
We have to make them reverse it, because they aren't going to do it otherwise. Tax the shit out of them until they do the right thing, and keep the threat of taxes hanging over their heads to keep them doing the right thing.
Real GDP Compound Annual Growth Rates
GDPCA 9 April 2026
1947-1984: 3.638%
1984-2017: 2.679%
2017-2025: 2.476%
The 0.5% estimate is the annual rate of real GDP growth in 4Q, and the figure doesn't sound like much of a revision until you remember that the estimated annual rate in 3Q was 4.4%.
That's one hell of a drop, whether it's to 0.7% or to 0.5%.
In other words, the economy nearly stalled in 4Q.
Meanwhile real GDP for full year 2025 increased at a measly 2.1% rate.
CNBC buried the bad news in a different story, seven paragraphs down:
Inflation held sticky at 3% as U.S. headed into war with Iran, key Fed gauge shows
... Separately, the Commerce Department reported that economic growth was even slower than previously reported for the fourth quarter of 2025.
Gross domestic product, a measure of all goods and services produced, rose just 0.5% on a seasonally adjusted annualized rate, down from the prior reading of 0.7% and the initial estimate of 1.4%. The full-year growth rate held at 2.1%.
The department said the downward revision came primarily to lower investment than previously indicated. ...
Gee, I thought Trump said $18 trillion in investment was flowing into the economy?
Golden Age, my foot.
Meanwhile the initial estimate was cut in half by the second estimate, and the final estimate cut that by nearly 29% more. They were off by only 64% in the end.
Remember, this is all pre-Iran-War-induced oil crisis, too.
It's going to be ugly.
SPX(average annual)/GDP(trillions of dollars), then vs. now
1938: 131
1942: 52
1964/1965: 118
1982: 35
2000: 139
2009: 65
2019: 135
2025: 202
Median 1938-2019: 81
This ratio has been above 139 for six consecutive years 2020-2025, which is unprecedented for the era shown. Even so, return places third because dividends are puny in the age of obscenely overpaid dirty rotten CEOs and management.
Return: nominal/real, average per annum, dividends fully reinvested
12/1942-12/1965: 15.43%/12.30%
12/1982-12/2000: 16.66/12.97
12/2009-12/2025: 14.09/11.23
Ronald Reagan didn't make America great again, and neither has Trump.
Real GDP Compound Annual Growth Rates
1947-1984: 3.652%
1984-2017: 2.675%
2017-2025: 2.416%
Fourth-quarter GDP revised down to just 0.7% growth; January core inflation was 3.1%
Economic growth was much slower than expected in the final three months of 2025 while core inflation rose to start 2026, the Commerce Department reported Friday. ...
The first revision of the GDP reading was a sharp step down from the previous estimate of 1.4% and well below the Dow Jones consensus forecast for 1.5%. It also marked a considerable slowdown from the 4.4% gain in the prior period. For the full year, GDP posted a 2.1% increase, or one-tenth of a percentage point lower than the previous reading. In 2024, the economy rose at a 2.8% pace. ...
On the inflation side, readings for January were mostly in line with estimates, though they showed price increases running well ahead of where the Federal Reserve would like. ...
Core pce inflation has been range-bound around 3% since Dec 2023. For 2009 through 2020 it averaged half that, 1.5%.
The compound annual rate of real GDP growth since 2017 has been 2.416%, almost 34% lower than the post-war rate for 1947 through 1984 of 3.652%.
The rate for 1984 through 2017, also using today's data, was 2.675%, also higher than the rate since the Trump tax reform eight years ago.
Trump has not made America great again, any more than Reagan did.
GDPCA CAGR
1929-1984: 3.569%
2017-2025: 2.483%
Nominal GDP in 2025 would be $61.524 trillion instead of $30.778 trillion had economic growth continued at the 55-year 1929-1984 compound annual rate of 6.869%.
That's the difference the 26% reduction in the growth rate to 5.079% has made in the 41 years since 1984.
The compound annual growth rate since the Trump tax reform from 2017 has been slightly, but not a lot, better at 5.795% on an annual basis. Measured 4Q on 4Q over the 8 years the compound annual rate is a little better still at 5.814%.
Meanwhile the seasonally adjusted annual rate of real GDP growth fell from 4.4% in 3Q2025 to 1.4% in 4Q2025 in today's report:
American leadership continues to avoid the elephant in the living room of economic growth.
1984 marked the turn, contrary to Ronald Reagan, when America's best days truly were behind her, and economic growth then hit the big brick wall after 2007 and nothing anyone has done has fixed it.
In the 78 years to 2007 nominal GDP (GDPA) grew at a compound annual rate of 6.525%, but only at 4.281% in the 18 years since then.
The corresponding real values are 3.448%, and . . . just 1.982%.
Yes, that's right. Real GDP (GDPCA) has been growing at sub-2% since 2007.
Politicians who talk up economic growth aspire to better days but do not deliver.
The first step to authentic economic recovery means admitting that you have a problem.
The double whammy burger you order never looks as good as the picture.
The compound annual growth rate before that, for the 60 years from 1947 to 2007, was 3.469%.
We're doing 42% worse.
It's uncanny.
One path to U.S. fiscal disaster is most alarming — and most likely
... An Everest of debt is an incentive for an inflation crisis to reduce the value of existing debt by paying lenders with debased dollars. But inflation would become baked into the expectations of investors, who would demand higher interest rates. Then R>G would bite: When interest rates paid on debt exceed the rate of economic growth, a crisis intensifies as rising interest rates depress economic growth. ... The most probable, and most ominous, outcome would be a gradual crisis. ... Nothing unsettles a middle-class nation more rapidly than inflation, a component of all of these crises. ...
10-year Treasury yield rises after Fed keeps rates steady, notes ‘solid’ economy
... “Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization,” the post-meeting statement said. “Inflation remains somewhat elevated.” ...
“I think, and many of my colleagues think, it’s hard to look at the incoming data and say the policy is significantly restrictive at this time,” Fed Chair Jerome Powell said in a press conference. ...
The economy should be three times the size it is, $90.4 trillion in GDP instead of $31.1 trillion.
GDP since Reagan 3Q1984 (41 years) through the Trump present moment has grown at a compound annual rate 35% lower than for 3Q1947-3Q1984 (37 years): 5.076% vs. 7.847%.
Trump GDP CAGR since 3Q2017 (8 years): 5.878% (25% lower than the post-war to 3Q1984).
$4.08425 trillion GDP after 41-years at a compound annual growth rate of 7.847% would be $90.41555 trillion in 3Q2025 instead of $31.09802 trillion, 2.90 times more.
That's why you feel poorer.
Reagan didn't make America great again, and neither has Trump.
