Let's talk about plummeting GDP in the US.... - Belle of the Ranch [View all]

Well, howdy there Internet people. It's Belle again. So, today we're going to talk about plummeting GDP in the US.

The last quarter of last year was even worse than the initial government estimates. The initial estimate said the US economy, as measured by the GDP, grew at a meager 1.4%. Now that more data has come in and the revision has occurred, that number is slashed in half.

According to the department's Bureau of Economic Analysis, the GDP rose at a seasonally inflation adjusted annual rate of only 0.7%. When looking at the whole year, the GDP saw a 2.1% increase. For comparison, the economy Trump trashed during the 2024 campaign rose at a rate of 2.8%.

Wow, that's funny and in a way just desserts for those who overlooked all of Trump's issues for unbelievable promises of economic prosperity. What isn't funny is what it signals.

People are familiar with recession and depression, but over the years, the US has developed methods of dealing with recession and moving out of them relatively quickly. However, stagflation isn't as easy to get out of.

Stagflation is the unlikely combination of a bad job market leading to higher unemployment along with high inflation and low growth. Inflation is ticking up and we haven't even finished feeling the effects of Trump's tariffs.

Now we have rising gas prices that will likely add to it. Unemployment is ticking up, jobs created going down with economic issues and AI promising even more trouble in the job market. And now we see incredibly low growth. Granted, it's just a single quarter, but it's a sign and shows the stage is set.

If you look up what triggers stagflation, you'll find three causes pointed to most frequently.

First is policy mistakes. I would suggest a president using his platform to paint a rosier picture of the economy than actually exists would count. I think threatening the independence of the central bank would count as well. Maybe bouncing a bunch of people off of health care and yanking the social safety net out from under the working class should be thrown in too.

The second reason is trade restrictions. You know, tariffs. I feel like I don't need to dive into this one.

And then there's the third, the big one--supply shocks. Generally in energy, like the one that's happening right now.

Adding in to the normal trouble of stagflation is the US debt getting so high that some tools typically used to deal with an economic problem might be out of reach. That debt was made even worse by Trump's one big beautiful for billionaires’ package.

In short, there are massive warning signs in the US economy right now, and it seems like most in the administration are ignoring them while just hoping things work out. Trump's elective war with Iran, which he still has not justified to the American people, may be the straw on the proverbial camel's back.

Anyway, it's just a thought. Y'all have a good day.