Courtesy of Pam Martens
Public Debt as a Percent of GDP
By Pam Martens and Russ Martens
The much anticipated Gross Domestic Product (GDP) number for the second quarter of 2018 was released at 8:30 a.m. this morning. President Trump had played advance man for the number during a rally yesterday saying some were predicting it could be over 5 percent but he would be happy if it had a 4 in front of the number. The number came in at 4.1 percent with the first quarter GDP being revised up to 2.2 percent.
While the President would like to see this as a lasting trend owing to the brilliance of his economic policies, experts say the U.S. is far more likely to revert back to the trend of growth in the 2 percent range. The Federal Reserve is projecting a GDP rate of 2.8 percent for all of 2018; 2.4 percent in 2019; and back to the sluggish 2 percent GDP in 2020 – the type of tepid annual growth that has plagued the country since the epic Wall Street crash of 2008 delivered the worst period of wealth destruction since the Great Depression.
The Obama administration also saw some quarters where GDP ratcheted above trend – but the annual rate of GDP growth remained subdued. In the best economic year of the Obama presidency, 2015, GDP came in at 2.9 percent.
Trump achieved this one-quarter number on the back of a trillion dollar tax cut passed last year and a $300 billion stimulus boost passed in February of this year to spread over this year and next. The outsized GDP number was also likely buoyed by corporations rushing to stock up on materials needed to run their businesses before the new tariffs kick in.
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