By Patricia L Johnson and Richard E Walrath

The problem with any economic number released in the U.S. is the fact a large majority of voters are basically clueless when it comes to the actual meaning of the numbers.  Let’s face it, numbers are boring, so it makes little sense to release numbers if voters, and would-be voters, are not able to comprehend their meaning.  A prime example is U.S. GDP Growth Rate

U.S. GDP or Gross Domestic Product is the total value of all goods and services produced in the United States.  The most recent GDP value was $20.5 trillion dollars for 2018.  GDP is calculated by using the following equation GDP = C+I+G+ (X-M) or GDP equals private consumption plus gross investment, plus government investment, plus government spending, plus exports minus imports.

While the actual GDP is indicated for a year and doesn’t change until it is calculated for the following year, the GDP growth rate is released for a three-month period.  The growth rate is the difference between the GDP for the previous quarter, compared to the current quarter and is indicated as a percent.

This percentage is subject to change once additional data becomes available.  The Real GDP Growth Rate released on July 26^th, by the Bureau of Economic Analysis, was the “Advance Estimate”.  A new percentage will be released on August 29, 2019 called the “Second Estimate for the Second Quarter 2019, while the “Third Estimate” will be released September 26, 2019.

The 2^nd quarter, GDP growth rate percentage released on July 26, 2019 indicated a rate of 2.1 percent for the quarter.  Translated, that means during the period from April 1, 2019 through June 30, 2019 our Gross Domestic Product growth rate, was a full 1.0 percentage point lower than the prior quarter [January through March 2019 when GDP growth was 3.1 percent].

2.1 percent is the advance number so it will probably change within the next few months as additional information becomes available; but on a comparative basis GDP growth rate has averaged 3.21 percent from 1947 until this year.  GDP growth rate is one of the most widely used economic indicators released and a lower percentage for the first two quarters of this calendar year is not indicative of a “great” economy.

Forbes recently published an article titled “Trade War is Hiding China’s Big Problems” with one of the problems listed as China’s “soaring debt”.  China’s government debt to GDP is 50.5% for 2018, while the U.S. recorded a government debt of 106.10% of GDP for 2018.

What no one is bothering to tell voters about our supposedly GREAT economy is government debt to GDP averaged 62.31 percent from 1940 until 2018.  Under this Administration, government debt to GDP has risen 43.79 percent.  What do you have to show for the record 44% increase in debt to GDP?

Along with worrying about China’s debt we might want to give a passing thought to “soaring” U.S. debt, which is now over $22 trillion dollars [$22,023,283.00 through June 2019].  Year to date figures through June 2019 released by the Treasury Department indicate we took in $2.6 trillion dollars this fiscal year and spent $3.4 trillion, resulting in a 2019 budget deficit of $747 billion which will be added to the $22 trillion dollar debt we already have and we have four more months to continue our spending spree before the fiscal year ends.

On March 2, 2018, the President of the United States wrote on Twitter that ‘trade wars are good and easy to win”.  As time passed, he spoke of the many billions of dollars the US was collecting in tariffs, due to his policies.  Fifteen months later the facts are as follows:

May 2019 (the latest recorded data) had a trade deficit of $55.5 billion dollars as follows:

EXPORTS                $210.6 BILLION

IMPORTS                $266.2 BILLION

DEFICIT               $  55.5 BILLION

China, of course, added the most to the May deficit with the U.S. importing four times as much as we exported.  So far this calendar year [Jan through May of 2019], our trade deficit with China has totaled $137.1 billion dollars.

You may hear the words “great economy” over and over and again and you might believe it, but the facts are; our country is headed in the wrong direction economically.

© Patricia L Johnson and Richard E Walrath

Patricia L Johnson is a former special assignment writer-photographer.  Richard E. Walrath  is a former Budget Analyst for Ohio State University, residing in Central Ohio with his family.