by David Stockman, Lew Rockwell:

You couldn’t have timed that better. The Donald managed to hold on to a “2” in Friday’s GDP report, but it was entirely due to a boom in government spending.

We’d call it a kind of stick save that came, ironically, the very day Trump is planning to sign a $1.7 trillion budget abomination. The deal negotiated with Pelosi and Chuckles Schumer, and voted against by a large majority of House Republicans, shit-cans the decade-old discretionary spending caps and permits unlimited Federal borrowing through June 2021.

So who needs Hillary? Or even Barry!

As it happened, the 2.035% seasonally adjusted annualized growth rate for Q2 made it over the hump by a smidgen on the strength of an aberrant 0.85% contribution to GDP growth from the government sector (federal, state and local).

The latter figure compares to a 0.24% average contribution from the government sector during the Donald’s first nine quarters in office. So if you merely adjust for the excess contribution (0.61%) from government, you would have had an even more punkish 1.43% headline GDP growth rate this AM.

Then again, it is only through the miracle of Keynesian GDP accounting that economic waste on defense and domestic pork barrels or extractions from taxpayers to fund bureaucrats’ wages and other purchases count as “growth”. Self-evidently, when the state becomes corpulent like at present, it undermines prosperity and the rudiments of real wealth gains.

And that gets us to where the Donald is really leading the nation – and it surely is not MAGA. Better to just recycle those red baseball caps and slap on the letters for MABA. Today’s GDP report is just one more reminder that Make America Broke Again is the actual path ahead.

The truth is, the Donald, who is fiscally and economically ignorant, and his advisors who are stupid (Mnuchin) or charlatans (Kudlow and Hassett), are perpetuating a cruel hoax. Namely, that “growth” at this late stage of the business cycle can forestall fiscal disaster.

But when you are in debt to the tune of $22 trillion nominally, and actually $42 trillion when you consider what is already hardwired into the budget over the next decade, even 1960s style growth (4% + real GDP gains) couldn’t move the needle much.

Needless to say, the Q2 GDP report put the kibosh on even that delusion. If you look at real final sales in order to remove the short-run inventory noise (destocking actually reduced headline growth this quarter), it is damn evident that the sugar high is over.

The 1.8% gain over the 12 months ending in June, in fact, is the lowest rate of gain since Q2 2014. And as the chart makes clear, there’s simply no basis for the claim that the Trump-O-Nomics has caused a sustained acceleration of growth.

Indeed, at this late stage of the business cycle (a record 121 months), the decelerating trend shown above is all the warning you need.

Here is what happened to real final sales during the last few quarters before the Great Recession incepted in 2008. The annualized rate of gain dropped from 3-4% thru early 2006 to 1.6% by Q2 2008 before finally rolling over at the recession bottom.

Then again, the public and private debt burdens were far lower on the eve of the Great Recession than they are today – meaning that the headwinds to expansion have become commensurately greater. Public debt stood at $9.2 trillion in Q4 2007 versus $22 trillion today, while total public and private debt of $52.6 trillion back then has subsequently ballooned to $72.1 trillion.

So the last thing the US economy needs is more debt, but that’s exactly what was behind even this morning’s modest growth and is what the Donald reckless fiscal policies are piling on in spades.

As to the latter, here is what the Committee for a Responsible Federal Budget reckons has been the future year impact of the major fiscal enactments to date. If the current deal becomes law as expected, legislation signed by Donald Trump – including tax cuts and increased spending – will add $4.1 trillion to the national debt between 2017 and 2029.

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