Visualizing U.S. Economic History Timeline
President Trump boasted at the start of his administration that he would return the country’s GDP growth rate to as high as 4,5 or even 6%. The main reason it’s so hard to believe the U.S. economy could grow that fast is because it is already enormous. Every additional percentage point represents about $2.5 trillion in new wealth. That being said, the economy is still on a roll as it continues its longstanding upward trajectory, as our latest visualization makes clear.
We originally got the idea to illustrate GDP across time by reading a set of figures on The Balance. The Bureau of Economic Analysis is responsible for tracking the numbers. Gross domestic product represents the total monetary value of all final goods and services produced across the economy. It’s a widely accepted way to measure and compare economies. The purple bar across the horizontal axis of our visual indicates a recession. Keep in mind, our figures show real GDP, which takes into account inflation. This means you’re seeing actual economic growth, not changes in the value of a dollar.
The 5 Best Years for GDP Growth
The 5 Worst Years for GDP Decline
Taking a long 90-year view of GDP growth, combined with major historical events, reveals a few interesting facts. First, the sharpest increases and decreases both happened during the 1930s and 1940s. The Great Depression obviously damaged the economy, and production for World War II clearly spurred economic growth. Bear in mind, however, the U.S. economy was relatively small, staying below $3T until 1959. In other words, big swings up or down are large in terms of percentages but small compared to the economy today.
In fact, the best time for GDP growth happened in the three decades following World War II. The Korean War and the Vietnam War positively impacted U.S. economic growth, or at least they didn’t halt the upward trajectory of GDP. The moon landing no doubt had a positive impact. The Apollo space program employed roughly 400,000 people. Meanwhile, the U.S. government starting spending lots of money on social programs and left the gold standard, allowing it to enjoy a long period of prosperity.
More recently, the Great Recession took an obvious bite out of GDP, slashing some $500B from the economy in real terms. The country has clearly recovered, with GDP hovering around $19.12T as of Q3 2019. It’s an open debate to what extent Trump’s tax cuts positively impacted the economy. The stock market is near an all-time high, however so is the deficit at $984B. And yet the country will need to double its most recent GDP growth of 1.9% to meet the low end of President Trump’s predictions.
What do you think? Have the Trump tax cuts helped the economy to grow, or will they end up hurting the country in the long term? Let us know your thoughts in the comments.