Well, the GDP report came out this morning. The GDP is an attempt to measure the size of the economy. Although the GDP has its problems, it is nevertheless reasonable to use it as a consistent baseline as to what direction the economy is moving. I have seen coverage today both on how great it is and on the many problems. Let’s take a more detailed look to see which side is right—or whether both have good points.

I’ve spent the past couple of posts painting a picture of how dire the situation is with the deficit and the debt—and it really is. But now we can turn to the real questions: is this a solvable problem or not? If so, what would it take? Indeed, there are a couple of ways the problem can be solved. Some are painless and others not so much. Let’s start with the easy ones.

I last looked at whether the housing market might be rolling over back in March. At that time, I concluded that the industry was indeed past its peak. I also determined that we were still not close to the end of the cycle. With all of the weak data we have seen from this sector recently, I thought it was a good time to take another look.

In recent posts, we have looked at the deficit over the next 10 years, according to the nonprofit Congressional Budget Office (CBO), and the debt over that same period. Now, we are ready to take a look at what that problem might mean for us as a country. It is certainly a problem, but is it solvable? And if so, what would it take to solve it?

Last week, we talked about the deficit, including how it is at unsustainable levels and how it is expected to get worse (much worse) over the next several years. What we left open was when and how the deficit actually turns into trouble.

The other day I got an excellent question from a reader (below), which really cuts to the core of what I am trying to do here. I was going to respond to her directly, but then I decided it was such a good question that it deserved a post of its own.

One of the important concerns we face today is the deficit. Although it has been overshadowed recently by the headlines on trade, it is actually a potentially bigger problem and is definitely a more certain one. As such, we need to take a look at exactly what the problem is, what it could mean to our investments, and perhaps most important, whether the problem is solvable—or not.

As we start the second half of 2018, we find ourselves in a much different place than we were at the end of the first quarter. Back then, we were worried about a slowdown, and markets had pulled back. Now, despite very real policy concerns, the economy looks considerably healthier than it did then. Indeed, the markets have proven to be remarkably resilient in the face of growing policy risks.

In considering what the third quarter will look like, it is worth taking a more detailed look back at Q2 2018 and how it reversed a fairly weak first quarter.

As we begin July, let’s take a look back at the markets in June, plus what to expect in the month ahead.

Whether it is in the Comments section of this blog, the Have a Question? form you see on the right, e-mails, or everyday conversations, people ask me a lot of great questions. It’s just the nature of the work I’m in. But since these questions come in from so many different places, I thought it would be useful to accumulate them—and my responses—and share them here for the benefit of all my readers. Today, we have two reader questions, so let’s dive right in.