Post-Reagan GDP underperformed the immediate post-war by over 26%, Trump-era GDP underperforms it by almost 32%

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%

 

Ronald Reagan's goal of a 600-ship U.S. Navy made it to 594 in 1987, but in 2026 we can barely deploy 300 because of Bill Clinton, but Trumpty Dumpty never mentions that

 

 After the end of the U.S.S.R. in 1991, Bill Clinton gutted the Navy.

We went from 541 ships in 1992 to 336 by 1999.

And now we can't stop the Houthis in the Red Sea, nor Iran in the Persian Gulf. 

Ronald Reagan didn't make America great again, and neither has Trump

 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%

 

 

That right there is a stagflation headline

 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. 

 

 

SPX return since August 2000 vs. Jan 1871-Jul 1982

 

Aug 2000-Jan 2026: 8.19% pa / 5.53% real

Jan 1871-Jul 1982: 8.15% pa / 6.18% real

Jul 1982-Aug 2000: 18.99% pa / 15.28% real 

GDP in 2025 would be double what it is had economic growth continued after 1984 at the 1929-1984 compound annual rate of 6.869%

 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: 

Fourth-quarter U.S. GDP rose just 1.4%, badly missing estimate; inflation firms at 3%

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. 

 

It's OK when I do it: Hypocritical Trump lauds $36 billion Japanese investment in U.S. oil and gas, one week ago bashed Reagan era $25 billion equivalent in U.S. automotive sector

But Trump's sin could end up dwarfing Reagan's by 22 times. 

 

 Trump lauds Japan’s pledge to invest $36 billion in U.S. oil, gas and critical mineral projects

U.S. President Donald Trump has welcomed Japan’s pledge to invest nearly $36 billion in oil, gas and critical mineral projects in Texas, Ohio and Georgia. 

The commitment represents the first tranche of investments by Japan following a landmark trade deal between the two countries, one in which Tokyo pledged to invest $550 billion in American-based projects and Trump cut tariffs on most Japanese imports to 15%. ...

 

The wealth inequality of today's K-shaped economy goes back to the Reagan Revolution

Wealth inequality and the ‘K-shaped’ economy are more striking than ever, data shows

 

They take vacations and buy luxury goods. You struggle to pay for food, shelter, and transportation.

 

K is not OK.

 

... A key measure of wealth concentration called the Gini coefficient sits at 60-year highs, according to a report from U.S. Bank published earlier this month. ... The net worth of America’s top 1% hit a record share of nearly 32% in the third quarter of 2025, the Federal Reserve reported. By comparison, the bottom 50% cumulatively held 2.5% of overall net wealth.

 

The portion of U.S. GDP heading to workers in the form of compensation tumbled to its lowest level in its more than 75-year history, per data tracked by the Bureau of Labor Statistics. That means the average nonfarm business worker is seeing an increasingly small slice of an economy that has largely boomed over the last 15 years. ...

 

Total relative “outlays” — a broad measure of spending and nonmortgage payments — by U.S. consumers in the top 20% hit multidecade highs last year, a data analysis conducted by Moody’s Analytics found. The other 80% tumbled to new lows, the data shows. ...

 

While the “K-shape” term became popularized as an explanation for the uneven economic recovery seen during the pandemic, economists say the origins of this breakaway can be traced back decades earlier.

This type of diverging economy stems from the economic reorganization seen during the Reagan administration, according to Joe Brusuelas, chief economist at tax firm RSM. About two decades later, the structural break that created the K-shaped economy, as it’s now understood, was more clearly observed in the wake of the Global Financial Crisis of the late 2000s, he said.

That was in part due to the loss of wealth tied to the historic housing market crash, Brusuelas said. On top of that, he said the jump in joblessness limited earnings potential for those without steady employment in their prime working years.

The Great Recession “created the conditions for the winner-take-all economy that emerged in its aftermath,” said Brusuelas, who first heard the K-shape term around 2008. “If you live, work and inhabit certain portions of the economy, you might as well live on the dark side of the moon compared to what goes on down-market.” ...

To make meaningful inroads, the U.S. would instead need to focus on tax reform and expanding social safety nets, according to RSM’s Brusuelas. ...

Today's GDP report indicates Trump GDP since 2017 is undershooting post-war performance up to Reagan 3Q1984 by 25%

 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.

 

 

In 2018 The Wall Street Journal was still defending China's admission into the WTO, today it pretends it wasn't part of that bipartisan folly

 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.

 

Unbelievably rosy GDP report contained core pce inflation data at 2.9% countering previous rosy core cpi inflation report at 2.6% and indicating rising inflation

 U.S. economy grows by 4.3% in third quarter, much more than expected, delayed report shows

 

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 economy moved forward during the period despite persistent signs of inflation pressures.

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. ...

 As for the GDP report, even if you accept the rosy number as reported, it remains that . . .

Trump's real GDP since 2017 is growing at a compound annual rate which is 5% lower than the rate for 1984-2017; and

 

Trump's GDP since 2017 is growing at a compound annual rate 21% lower than the rate for 1947-2017.

 

Meanwhile GDP since 1984 is growing at a compound annual rate which is 28% lower than for 1947-1984.

 

And GDP since the Great Recession in 2007 is growing at a compound annual rate 42% lower than for 1947-2007.

 

The results of the era inaugurated by Reagan have been devastating. Real GDP today would be much higher had the previous long term trend continued.

 

3Q1984 Reagan real GDP of 8252.46 at the pre-Reagan rate of compound annual growth since 1947 would be 36213.94 today instead of 24024.95, 50% higher.

 

The Trump era is doubling down on stupid, not breaking with it. It is guaranteed to get us nowhere, faster.

Even Larry Kudlow recognizes that GDP hasn't been good since 1984

... 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.

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. 

This article in liberal VOX is a great defense of the metric called Gross Domestic Product

 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.

 

 

Trump has attacked the Houthis, Iran, and is assembling an armada against Venezuela as we speak, but fantasy world dweller Scott Greer says the future of the GOP isn't about foreign policy

The Old Guard Is Not the Right’s Future

  ... Republicans are less likely now to back NATO and other international commitments. Republicans are not as greatly concerned with foreign affairs as think tankers are. It was ranked near the bottom of issues that 2024 voters cared about. ... Obsessing over fiscal policy, advocating for more foreign interventions, and being willing to capitulate on immigration is not a winning formula either in the GOP primaries or for a general electorate. ... [David] French, unlike other Never Trumpers, has given up on the GOP entirely. He thinks it’s Trump’s party now and for the foreseeable future.

He’s obviously right. Only an America First candidate, not a Paul Ryan type, can hold the coalition together. ...

 

The alt-right fringe is now acceptable at The American Conservative, and in the line-up at Real Clear Politics, all of which have become completely incoherent, including on the primacy of fiscal policy, which is the cause of, and the solution to, all the ills now afflicting the young people Greer would speak for.

 

Reagan authored those ills, and Trump has double-downed on them.

 

It is obvious to everyone except Republicans that the Reagan Revolution of tax cuts for the rich has failed to produce the economic growth America was accustomed to before he became president

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. 

Ronald Reagan July 3, 1983: Don't let anyone tell us that America's best days are behind her (but they are)

 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.

The roll over of GDPA CAGR in 1981 was retested in 1984 (black line)

 

The president's tariff retaliation against Canada is purely out of personal pique and is a tyrannical abuse of power

The Congress has the tariff authority, not the president, according to the constitution, and needs to reign in the powers it has delegated to the executive if it cares what is good for the country.

65% of the country disapproves of the GOP-controlled Congress. 

 

Mad King Ludwig is delusional, Reagan loathed tariffs in principle

 

Lying Trump will never rise to the level of Reagan, let alone of any other president

 If Reagan were alive today, he'd reject Donald Trump and his trade war against the whole world, including and especially against our friends and allies in Canada.

Reagan's full remarks from April 1987, excerpted by Doug Ford in the ad, are shown below.  

Trump claimed Canada’s anti-tariff ad twisted Reagan’s words. Compare for yourself

 

Ontario to pause Reagan tariffs ad after Trump terminated Canada trade talks

SPX since August 2000 continues to underperform the pre-Reagan era by almost 20% in real terms, the Reagan bull market era by almost 68%

SPX 8/2000-5/2025: 7.62% per annum nominal, 4.95% per annum real (inflation rate 2.54% per annum)

SPX 1/1871-7/1982: 8.15% per annum nominal, 6.18% per annum real (inflation 1.86%)

SPX 7/1982-8/2000: 18.99% per annum nominal, 15.28% per annum real (inflation 3.22%) 

 

We'll get the June 2025 Consumer Price Index report on Tuesday July 15th. The previous read was 2.4% yoy overall, and 2.8% yoy for the core.