Today, the Bureau of Economic Analysis released the third estimate, the final estimate of Q1 2019 GDP. The minions at the BEA claim GDP grew a strong 3.1% in real terms.
Since President Trump has taken office, True GDP, as measured in True Dollars™ has grown a scant 1.6%. Now before you become shocked, keep in mind this.
The economy had shrunk a shocking -38% under Obama, the worst performance of the economy, perhaps ever. Likely, this is why US residents believe the economy seems so much better under President Trump.
In True Dollar terms, the economy has a long way to go to recover back to all-time peak True Dollar GDP of $2.3715 trillion of Q4 2007.
Likely, as long as Congresses of today and the future continue to allow 2.62 million immigrants a year as they have from 1960 through May 2019, it is unlikely the economy ever will grow back to all-time peak GDP.
When the working-age population growth rate outstrips the return to capital rate, a country gets less capitalism. This is so because as true wage rates fall, prices must fall since wages are the source of prices.
As true prices fall, the true returns on extant capital must fall. Under falling true returns, future true capital spending will be less. Once this happens, the capitalism death whorl gets underway.
If Congress and the President could deport the 22.8 million, the US economy would skyrocket as firms would be forced to innovate by discovering new ways to amplify the output of extant labor through machines, artificial intelligence and the like.
The Trump Recession Already Came
Lately, the scare buzz by the financial press and the political press has been a pending recession.
But True GDP shrank in the 4th Quarter of 2018 by -0.44% under President Trump. The recession was short. It came and went already. It started in Q3 2018 and ended in Q4 2018.
Considering the many headwinds the President faces in trying to execute extant law and deal with foreign adversaries, President Trump seems to be doing a capable job.
It is all too likely for the economy to grown about 2.42% in total under President Trump to the last quarter before the 2020 presidential election.
If growth were to remain on the same trajectory and if President Trump were to be reelected, total growth under a two-term Trump president might come to 5.63%. That would be the lowest growth for any president since President Kennedy but of course would be substantially better than the decline presidencies of Reagan, both Bushes, and Obama.
If we were to take the average of True GDP from the first quarter of Ronald Reagan to the lowest quarter of Bill Clinton, before the Greenspan-Bernanke Great Inflation, the greatest credit bubble in the history of mankind, that average comes to T$1,590.62 billion.It is all too likely for the economy to grown about 2.42% in total under President Trump to the last quarter before the 2020 presidential election.
If growth were to remain on the same trajectory and if President Trump were to be reelected, total growth under a two-term Trump president might come to 5.63%. That would be the lowest growth for any president since President Kennedy but of course would be substantially better than the decline presidencies of Reagan, both Bushes, and Obama.
What Should Future GDP Be?
To reach the average, the economy would need to grow 26.5%. That kind of growth without significant inflation (extension of bank credit) takes decades to happen.
Keep in mind, it took 22 years for 100% growth between Q3 1959 and Q3 1981. The majority of those years, the U.S. dollar was backed by gold; globalization was almost non-existent; the USA made most products that better than average foreigners could buy.
It took 14 years of Dot Com mania and residential realty mania to grow the economy 72.7% under the crazed aforementioned Greenspan-Bernanke Great Inflation.
For the Disbelievers
When some look at the chart of True GDP versus Real GDP, their minds can not believe this truth. The concept of Real GDP is a fallacious one.Yet, to calculate Real GDP, past inflated current dollars get used as a base year divisor. To accept that is like accepting a measuring stick that forever grows.
For more on this truth, see my work: "REAL" GDP IS FAKE, BOGUS, CRAP. AMERICANS AND SCHOOL CHILDREN HAVE BEEN HOODWINKED FOR DECADES.
Do You Recall Q3 2017?
Back in 2017, the BEA claimed real GDP grew 3% in Q3 2017, but this was after devastating hurricanes in Houston and Florida.The economy shrank in Q3 2017 in True Dollar terms. When you think about it, that should stand to reasoning.
See my work on it: US ECONOMY GROWS 3.0% IN REAL TERMS, BUT FALLS 0.6% IN TRUE TERMS, 2017 Q3 GDP REVEALS.
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