The Trump-Biden-Harris Economy Isn’t Doing Just Fine!

The ministry of truth purported to inform the world this AM that the Biden-Harris economy is doing just fine, with real GDP up by +3.0% during the quarter ending in June. But we don’t believe it for a New York minute.

In fact, what is really going on is still more of the UniParty con job, predicated on the Big Lie that America can borrow and print its way to prosperity. And to be fair about it, Trump argued the same thing back during his freakish sojourn in the Oval office, which fantasy he continues to propagate unto this very day.

As it happened, however, the public debt was $20 trillion when the self-proclaimed King of Debt was sworn in during January 2017 and will be $36 trillion when the semi-corpse of  “Joe Biden” is gurneyed out in January 2025. In the spirit of UniParty continuity and even-handedness, therefore, each of them will have accounted for $8 trillion of the gain.

Even if you give the threesome (Trump-Biden-Harris) a break and only count the added debt that was sold to the public, it totaled +$13.2 trillion thru Q2 2024, which compares to a nominal GDP gain of just +$9.55 trillion during the same Q4 2016 to Q2 2024 time span. So when the incremental Federal debt sloshing around the financial system amounts to 138% of the gain in nominal GDP, you don’t even have to look for the skunk in the woodpile; it’s staring you in the face.

In fact, between December 2016 and June 2024, government transfer payments alone rose from $2.7 trillion to $4.3 trillion at annual rates, thereby accounting for 24% of the gain in personal consumption expenditure (PCE) “growth”, although we are hard-pressed to fathom why transfer payments are classified as GDP growth in the first place. After all, consumption expenditures derived from either forcible extractions from taxpayers’ income or government borrowing do not represent new economic output in any way, shape or form.

Likewise, national defense expenditures in the NIPA accounts rose from $723 billion in Q4 2016 to $1.050 trillion in Q2 2024.  That $327 billion or 45% gain represented “output” of sorts from the government war machine, but it surely produced no “value” in the civilian economy which paid the taxes or interest on the borrowings which funded it. And at Washington’s current absurd trillion dollar spending level for defense, it adds hardly a whit to the intangible thing called national security.

Stated differently, and as we have shown elsewhere, America would be just as secure from nuclear attack or conventional invasion across the great Atlantic and Pacific ocean moats at just $500 billion of annual defense spending, if it were properly allocated to the strategic nuclear deterrent ($75 billion) and a fulsome air and sea-based defense of the homeland shores and airspace ($425 billion). Effectively, therefore, the neocon-driven $327 billion defense output gain since Q4 2016 has zero incremental value, even on the intangible national security scale.