Larry Summers talking today about an 'unsustainable' period of growth (GDP) for the rest of the Trump era:
“Yes, we are growing at a reasonably rapid rate, but it’s taking unsustainable fiscal deficits to drive us to that point. It’s taking unsustainable increases in credit to drive us to that point. It’s taking unsustainable increases in asset prices. You can always generate a sugar high. The real problem for us is not achieving growth, but achieving sustained, healthy growth with a financial environment that’s sustainable.”
Here's the thing....the US has a history when GDP growth existed....well over 30 years:
Year, CD-rate, GDP-rate
1965, 4.88-percent, 6.5-percent
1966, 6.14-percent, 6.6-percent
1967, 5.95-percent, 2.7-percent
1968, 6.39-percent, 4.9-percent
1969, 8.95-percent, 3.1-percent
1970, 9.06-percent, .2-percent
1971, 6.06-percent, 3.3-percent
1972, 5.65-percent, 5.2-percent
1973, 10.71-percent, 5.6-percent
1974, 12.06-percent, minus .5-percent
1975, 7.89-percent, minus .2-percent
1976, 6.31-percent, 5.4-percent
1977, 6.96-percent, 4.6-percent
1978, 11.28-percent, 5.6-percent
1979, 13.97-percent, 3.2-percent
1980, 17.74-percent, minus .2-percent
1981, 17.98-percent, 2.6-percent
1982, 15.12-percent, minus 1.9 percent
1983, 10.17-percent, 4.6-percent
1984, 12.08-percent, 7.3-percent
1985, 9.6-percent, 4.2-percent
1986, 7.83-percent, 3.5-percent
1987, 8.19-percent, 3.5-percent (Black Friday Year)
1988, 9.28-percent, 4.2-percent
1989, 10.40-percent, 3.7-percent
1990, 8.57-percent, 1.9-percent
1991, 7.17-percent, minus .1-percent
1992, 4.42-percent, 3.6-percent
1993, 3.39-percent, 2.7-percent
1994, 6.78-percent, 4.0-percent
1995, 6.71-percent, 2.7-percent
1996, 5.75-percent, 3.8-percent,
1997, 5.90-percent, 4.5-percent
1998, 5.67-percent, 4.5-percent
1999, 6.07-percent, 4.7-percent
2000, 6.94-percent, 4.1-percent
2001, 5.45-percent, 1.0-percent
2002, 2.16-percent, 1.8-percent
2003, 1.30-percent, 2.8-percent
2004, 2.66-percent, 3.8-percent
2005, 4.62-percent, 3.3-percent
As you can tell....the Bush era was the point where numbers were starting to decline, and continued on into the Obama era.
Not that I really cast doubts on Larry Summers....but he has not real concept of what the US did prior to the Bush era. Part of this blame? Going naturally back to CD rates and all the 'free' money of the Fed.
