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If you're worried about the US economy READ THIS

Posted on 4/6/25 at 7:29 pm
Posted by Quantum Physics
Member since Apr 2025
8 posts
Posted on 4/6/25 at 7:29 pm
While the rest of the countries in the world have low interest rates and have been implementing quantitative easing(QE) for several years(covid recovery) while at the same time barely growing

(china ran a 7% deficit while only getting 3.5% nominal gdp growth and having the lowest interest rates in their history last year)

(the EU had 1.0 gdp growth in 2024 an 0.6 in 2023 while having low interest rates and trillions an trillions of QE)

America on the other hand boomed with ~ 6% nominal gdp while the interest rates were at historical highs compared to the last several decades and with the US doing quantitative tightening(QT) for the last several years.

While the rest of the world deals with a gut punch(tariffs) to their slow growth(most of which comes almost completely from American trade surpluses) America is the only country still with high rates and doing QT, while also having extremely high gdp growth.

Here is the economic boom(Golden Age):

5% plus stock market boom -- end QT
10% plus stock market boom -- lower rates
10% plus stock market boom -- tax cuts for all Americans and American
Businesses
10% plus stock market boom -- 3.5-4 trillion in QE

Then because of the lower rates and QE:

0.5-1 % gdp growth from housing boom(before rates raised and QT, it was estimated to be adding 1.25 gdp per year and has been halted for years now)

~ 2 % gdp(600 billion) will come from the cost to service the debt. Current cost ~1.1 trillion future cost ~0.5 trillion saving roughly 600 billion

With foreign direct investment(FDI) and American companies' domestic investment, after these steps are taken, plus the results of the trade war, America could see ~ 2 gdp or more(already announce 5 trillion over ten years)

This adds up to 4.5-5 % gdp growth on top of our already high growth rate. Taxes on new gdp are estimated to be around 15 % which would result in an additional 0.75 % gdp

If investment in America by the government(600 billion from debt savings an 225 billion from additional tax revenue, both per year) add a multiplier, then it can be even more.(Think investment into NASA returning 32 dollars of gdp growth per 1 dollar spent in the past generations)
This post was edited on 4/6/25 at 8:19 pm
Posted by Lightning
Texas
Member since May 2014
3118 posts
Posted on 4/6/25 at 7:34 pm to
quote:

America on the other hand boomed with ~ 6% nominal gdp while the interest rates were at historical highs for the last several decades and with the US doing quantitative tightening(QT)


Which decades were our interest rates at historical highs and we were doing QT?
Posted by Quantum Physics
Member since Apr 2025
8 posts
Posted on 4/6/25 at 7:44 pm to
Our interest rates last year and before were higher than they had been in multiple decades. We have been doing QT for years now. Unless you're trying to be obtuse these charts should help you see what I was saying.



This post was edited on 4/6/25 at 8:06 pm
Posted by Lightning
Texas
Member since May 2014
3118 posts
Posted on 4/6/25 at 9:48 pm to
quote:

Our interest rates last year and before were higher than they had been in multiple decades.


So two years of rising interest rates after a decade of historically low interest rates.

quote:

We have been doing QT for years now.


We have been doing QT since June 2022, and for a two year period 2017-2019. We had 4 rounds of QE interspersed with those 2 rounds of QT.

I’m not being obtuse and I’m not disagreeing with you that the American economy will improve and these tariffs are not the end of the world. I think you were painting an overly rosy picture of our current position and that of the past few years.
Posted by Oneforthemoney
A town near you, la
Member since Dec 2013
2508 posts
Posted on 4/7/25 at 6:18 am to
We juiced govt that juiced economy under biden. Most jobs went to illegals immigrants rather than US citizens.

Instead of letting our market correct organically under obama, we did QE that created artificial bubbles that have yet to pop. In order to keep inflation in check during QE, FED played their only card, lower interest rates next to nothng. Soon as they start raising interest rates, inflation reared it's ugly head. Bubbles have yet to pop but they are coming
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