Trump economy tops 3% GDP growth in Q3 – should we care?

Despite the hurricanes that ravaged Texas and Florida last month, the United States economy posted a gross domestic product (GDP) of three percent in the third quarter. This beats original estimates of 2.4 percent GDP growth.

The markets are celebrating, the White House is cheering and the MAGA crowd are laughing.

But the key question is: should we be dancing around whenever the GDP is high or low?

Nope.

Liberty Nation writes:

“Imagine this: an entrepreneur decides to build a ship. The boat is an exorbitant investment – lumber, fiberglass, aluminum, cement, et cetera – and is constructed to fish for salmon, provide tourists with impeccable scenery, or to transport cargo. Unfortunately, it doesn’t catch any salmon. It doesn’t carry any passengers or cargo. But it does achieve one thing: contribute to the nation’s gross domestic product (GDP).

“Indeed, the GDP does not correctly judge the true value of products and services that enhance the country’s standard of living. As the libertarian think tank’s Christopher Casey writes, “It is a ruler with irregular hash marks and a clock with erratic ticks.”

“What makes the GDP even more flawed is the fact that it includes government spending as a major component. The U.S. government spends about $4 trillion every single year, and a significant portion of this is thrown into crunching the GDP – let’s just start a new war! Now you know why presidents and parties are apprehensive about spending cuts.”

The GDP is a flawed economic indicator, and it shouldn’t be taken too seriously. It might provide a snapshot, but it doesn’t give us the full picture.

That said, President Donald Trump did say that he would post three percent GDP growth, and he did. For that, he should be given a round of applause – but more of a slow cap.

Image result for slow cap gif

 

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