The U.S. economy grew at its fastest pace in nearly four years in the second quarter as consumers boosted spending and farmers rushed shipments of soybeans to China to beat retaliatory trade tariffs before they took effect in early July. Gross domestic product increased at a 4.1 percent annualized rate also as government spending picked up, the Commerce Department said in its snapshot of second-quarter GDP on Friday. That was strongest performance since the third quarter of 2014.
The longer term, however, is worrisome. Much of this is fueled by Trump’s Tax break. In effect he has taken a TRILLION DOLLAR LOAN to finance the sort of boost usually put into failing economies. Of course, Obama left Trump with a very strong economy in a long term growth curve, the longest in history. This is even more remarkable since since Obama and Bush worked together to avert the collapse of the economy in 2008. Adding fuel to that engine is worrisome especially since Trump’s fuel seems to be going into inflated stock prices while, outside of the virtual world, hard goods manufacturers are not investing in plants that build cars, appliances, office machines … the stuff of factory jobs. Trump’s fantasy is that American can compete in export of these hard goods seems absurd as even Tesla is building its new plant in China. And, the there is the “I word.” The key to long term growth of an economy is capital investment … factories, farm machinery, high speed communications, railroads, highways. The US lags behind our competition in the last three because Trump wants these to become ways for Wall Street to make money. This is a wet dream. Just compare Amtrack with its high speed competitors in Europe and China. Meanwhile or road system is rotting, bridges collapsing, and what government effort that still exists is being wasted on reverting to coal.