Last night at the CNN GOP debate there was plenty of the usual name calling and insults, but Trump showed a misunderstanding of the US GDP (Gross Domestic Product) and how the measurement of growth works.
“GDP (gross domestic product) was zero essentially for the last two quarters,” Trump said. “If that ever happened in China, you would have had a depression like nobody’s ever seen before. They go down to 7 percent, 8 percent, and it’s a national tragedy.”
Firstly, GDP was not zero, that would mean that there was absolutely no economic activity in the US in the last three quarters. We’ll give Mr. Trump the benefit of the doubt and assume that he misspoke. What he probably meant to say was that there was no growth in the GDP in the last three quarters.
This is not true either. In the last three quarters the US GDP has grown by 1 percent, 2 percent and 3.9 percent. In the year of 2015 the US GDP grew by 2.4. Perhaps not a boom economy, but 2.4 percent growth in a year is a sign of a healthy and sustainable economy. According to Investopedia, 2.5%-3.5% annual growth is considered ideal, allowing businesses to create jobs and run efficiently, but low enough to stave off inflation.
For the record, China’s GDP growth was 9.5% in 2011, 7.8% in 2012, 7.7% in 2013 and 7.3% in 2014. It is unclear if this qualifies as a national tragedy.