Actual economists: Trump’s rosy forecast is baloney
Keep in mind: these are actual degreed and credentialed economists who use complex mathematics and well-established models to study and predict economic behaviors, as opposed to, say, a former “reality” TV show host:
[E]conomic analysts have said that Trump’s growth rate target of 4 percent is audacious at best and implausible at worst, especially given broader factors like an aging population. The Congressional Budget Office and Federal Reserve project annual economic growth to hover around 1.9 and 1.8 percent, respectively, for most of the coming decade.
Four percent growth would require big gains in the size of the work force and productivity, but with baby boomers retiring and no boom in productivity, “you just can’t do it, mathematically,” former Labor Secretary Robert Reich told CNBC on Tuesday.
It’s just “not in the cards,” Reich explained.
“It would defy gravity,” Diane Swonk, a veteran independent economist in Chicago, told the New York Times last month.“It’s simple math.”
Sebastian Mallaby, who serves on the Council of Foreign Relations, told CNBC on Tuesday that “the economy is already operating at near potential.”
Economic growth is ultimately driven by two factors: population growth and technological innovation — and there’s only so much the government can do to affect either factor. Dale Jorgenson, a Harvard economics professor whose most recent forecasts show an economy growing by 1.8 percent annually over the next decade, explained to the Journal that workforce skills aren’t advancing. At the same time, few meaningful technological innovations have spurred job growth — with many advances leaving whole industries obsolete.
“This idea that you can boost [GDP growth] into a nirvana stratosphere … it’s not gonna happen,” Mallaby said. “If we think it’s gonna happen, we’ll make policy errors.”
Click here for reuse options!
Copyright 2017 Liberaland