Growth is Good: Why Slow Growth Can't Be The New Normal
America’s economy is growing at half the rate it used to. Slow growth rates have enormous effects on the quality of life over long periods of time. Getting back to rapid economic growth will alleviate budgetary problems, increase paychecks, and lead to widely shared prosperity.
Between 1950 and 2000, America's economy grew at a healthy rate of OVER 3%.
During those 50 years, middle class pay increased A LOT, and everyday life improved A LOT, because of the rapid growth of new inventions and better and cheaper goods.
Oh, and our country made some AMAZING accomplishments during that time.
That quickly expanding economic pie also gave us the resources to create a generous social safety net, that made life better for MANY PEOPLE.
So here’s why this matters. For the last 15 years, our economic growth has slowed to less than 2%.
Now, a 1-and-a-half-percent reduction may not seem like much, but if we had grown at 2% instead of 3-and-a-half-percent between 1950 and 2000, income per capita would’ve been MUCH smaller.
This slowed growth has already begun to create HUGE problems for our economy.
At 2% growth, economic gains have continued for a few, but have slowed for everyone else.
Innovation has slowed way down.
It also means that we won’t be able to afford that generous safety net much longer, which means painful cuts to social security, Medicaid and Medicare, and eventually higher taxes for everyone.
In other words, when our economy grows at 3%, life is pretty good for everyone. When it slows down, it's good for a few and not so good for the rest of us.
To make matters worse, more and more baby boomers are retiring, and our workforce isn’t growing fast enough to fund the promises we’ve made.
Thankfully, we can reverse the trend and experience faster and healthier economic growth again. And that process begins with policies that make it easier to work, start a business, or invent the next big thing. THAT will make the economy grow.