In these days of controversy and political wrangling, we seem to forget that America’s woes from an economic standpoint stem from eight straight years of GDP growth hovering around an average of 2.1 percent.
Yes, the United States’ economy is still the largest in the world, but when we look at the past two decades, America’s growth rate has dropped dramatically. In the 1950s and ’60s, the average growth rate was about 4 percent. In the ’70s and ’80s, that dropped to around 3 percent. In the past ten years, it’s been around 2 percent.
Since the second quarter of 2000, GDP has never reached the 5 percent level. In fact, the last time GDP surpassed 3 percent was in 2005 when it reached 3.3 percent—and that was the year of Hurricane Katrina when rebuilding from the storms helped spur the economy.
I have never been—and am not likely to ever be—one to defend the federal government or Congress for its irresponsible spending, lack of accountability and inability to develop any real fiscal policy.
But the fact is that America’s current $20 trillion debt will look like a walk in the park compared to where it’s heading for the next generation. Our deficit cannot be fixed until we get on a consistently better path to GDP growth averaging a minimum of 2.8 percent, along with trimming the size of government.
Around 2.6 percent GDP is the break-even figure that will allow us to maintain a do-nothing, crummy economy. Our economy is dependent on 3 percent growth to continue to thrive and to keep the national debt manageable and to move in a downward trajectory. We have reached the point where it’s become critically important that, as far as economic growth goes, we at…