Politics

FACT CHECK: Why Bush’s Growth Forecast is a Stretch

Published

10 years ago

June 17, 2015

Republican presidential candidate, former Florida Gov. Jeb Bush talks to members of the media after speaking to voters at the Derry Opera House, Tuesday, June 16, 2015, in Derry, N.H. Bush is campaigning in the nation’s earliest presidential primary state. (AP Photo/Jim Cole)

JOSH BOAK, AP Economics Writer

WASHINGTON (AP) — Republican presidential candidate Jeb Bush says there’s “not a reason in the world” why the U.S. economy can’t grow at 4 percent annually.

Actually, there are a bunch of reasons it probably can’t.

Many economists say the U.S. economy is ill equipped to grow consistently at even close to 4 percent. Current forecasts put growth averaging half that rate. Any president, Republican or Democrat, would have to overcome decades-long trends that are largely beyond the control of the Oval Office.

Those trends include the retirements of the vast generation of baby boomers — an exodus that limits the number of workers in the economy. Rising automation and low-wage competition overseas are among other factors. A result has been meager income growth, which has cut into the consumer spending that drives most economic growth.

“It would require substantial changes in fiscal and regulatory policy that I don’t believe any president could reasonably expect to enact in one term,” said Robert Stein, an economist at First Trust Advisors who was a Treasury Department official during George W. Bush’s presidency.

In his campaign announcement on Monday, Jeb Bush said “there is not a reason in the world why we cannot grow at a rate of 4 percent a year. And that will be my goal as president – 4 percent growth, and the 19 million new jobs that come with it.”

The pledge originated from a plan by the George W. Bush Institute to achieve growth averaging 4 percent for a decade.

Conservative economists defend the target as aspirational, a pledge that would leave the economy better off even if the next president fell short.

“I’m less concerned about the number than the commitment to grow rapidly,” said Douglas Holtz-Eakin, an economist who has advised Republican presidential candidates and now serves as president of the American Action Forum.

The historical odds of doubling growth from its current level are low.

Only four of the 16 presidential terms since World War II have experienced annual economic growth averaging more than 4 percent after inflation, according to research published last year by Princeton University economists Alan Blinder and Mark Watson.

President Harry Truman reaped the peace dividend as U.S. manufacturers helped rebuild nations devastated by World War II. The Kennedy and Johnson administrations enjoyed a boom because of tax cuts. And President Bill Clinton benefited during his second term from low interest rates and what eventually became a tech-stock bubble.

There are two primary ways to grow an economy faster: add more workers or increase their efficiency so that each hour on the job generates more income. Neither factor looks spectacular enough to deliver 4 percent growth, particularly since the share of Americans working has drifted downward as the number of retirees has increased.

“The demographics right now are for slowing population growth,” said Chad Stone, chief economist at the Center on Budget and Policy Priorities, a liberal think tank.

The economy has 157.5 million workers, including the unemployed on the hunt for a job, according to the Labor Department. Their ranks increased just 0.3 percent in 2014, the best year for hiring since the late 1990s. When economic growth averaged roughly 4 percent during Clinton’s second term, the growth rate for the number of workers joining the economy averaged 1.5 percent, nearly five times higher than the current level.

Because baby boomers are starting to retire, the nonpartisan Congressional Budget Office expects the rate will remain low and hinder broader growth. The CBO in January estimated that growth would average just 2.1 percent annually from 2018 to 2025.

In theory, Bush as president could overcome that obstacle by welcoming substantially more immigrants in the United States. This would cause the growth rate of workers to rise much more quickly, said Michael Strain, deputy director of economic policy studies at the American Enterprise Institute, a conservative think tank.

But efficiency gains — what economists call productivity — would still be a challenge.

For the past seven years, productivity growth has averaged a poky 1.4 percent, according to the Labor Department. That’s nearly half its rate between 2000 and 2007. Economists say it’s generally difficult for government policymakers to unleash sudden bursts of productivity.

One easy form of boosting productivity would involve government spending in infrastructure such as roads, bridges, ports and airports.

Josh Bivens, director of research at the liberal Economic Policy Institute, sees these investments as the “most reliable lever” to bolster productivity. Yet he notes that a 10-year, $2.5 trillion government infrastructure program would increase economic growth only 0.2 to 0.3 percent annually.

That increase would not be nearly enough to achieve consistent 4 percent growth after inflation.

And the Republican presidential candidates have been committed to finding ways to shrink government’s footprint instead of introducing new spending programs.

“There’s really no way,” Bivens said.

___

Associated Press writer Ken Thomas contributed to this report.

Oakland Post

Posts by Oakland Post

Up Next

Census Bureau Considers Dropping ‘Race’ from Survey

Don't Miss

Bush Brothers Have a Complex Relationship, Marked by Fierce Rivalry, Wounded Feelings

Oakland Post

Click to comment

Activism

U.S. House Minority Leader Hakeem Jeffries Speaks on Democracy at Commonwealth Club

Based on his first speech as House minority leader, “The ABCs of Democracy” by Grand Central Publishing is an illustrated children’s book for people of all ages. Each letter contrasts what democracy is and isn’t, as in: “American Values over Autocracy”, “Benevolence over Bigotry” and “The Constitution over the Cult.”

Published

10 hours ago

December 22, 2024

Oakland Post

: House Minority Leader Hakeem Jeffries at the Commonwealth Club World Affairs Council on Dec. 2. Photo by Johnnie Burrell. Book cover: "The ABCs of Democracy" by Hakeem Jeffries.

By Linda Parker Pennington
Special to The Post

House Minority Leader Hakeem Jeffries addressed an enthusiastic overflow audience on Monday at San Francisco’s Commonwealth Club, launching his first book, “The ABCs of Democracy.”

Based on his first speech as House minority leader, “The ABCs of Democracy” by Grand Central Publishing is an illustrated children’s book for people of all ages.

Each letter contrasts what democracy is and isn’t, as in: “American Values over Autocracy”, “Benevolence over Bigotry” and “The Constitution over the Cult.”

Less than a month after the election that will return Donald Trump to the White House, Rep. Jeffries also gave a sobering assessment of what the Democrats learned.

“Our message just wasn’t connecting with the real struggles of the American people,” Jeffries said. “The party in power is the one that will always pay the price.”

On dealing with Trump, Jeffries warned, “We can’t fall into the trap of being outraged every day at what Trump does. That’s just part of his strategy. Remaining calm in the face of turmoil is a choice.”

He pointed out that the razor-thin margin that Republicans now hold in the House is the lowest since the Civil War.

Asked what the public can do, Jeffries spoke about the importance of being “appropriately engaged. Democracy is not on autopilot. It takes a citizenry to hold politicians accountable and a new generation of young people to come forward and serve in public office.”

With a Republican-led White House, Senate, House and Supreme Court, Democrats must “work to find bi-partisan common ground and push back against far-right extremism.”

He also described how he is shaping his own leadership style while his mentor, Speaker-Emeritus Nancy Pelosi, continues to represent San Francisco in Congress. “She says she is not hanging around to be like the mother-in-law in the kitchen, saying ‘my son likes his spaghetti sauce this way, not that way.’”

Oakland Post

Posts by Oakland Post

Activism

MacArthur Fellow Dorothy Roberts’ Advocates Restructure of Child Welfare System

Roberts’s early work focused on Black women’s reproductive rights and their fight for reproductive justice. In “Killing the Black Body: Race, Reproduction, and the Meaning of Liberty 1997)”, she analyzes historical and contemporary policies and practices that denied agency to Black women and sought to control their childbearing—from forced procreation during slavery, to coercive sterilization and welfare reform—and advocates for an expanded understanding of reproductive freedom.

Published

11 hours ago

December 22, 2024

Oakland Post

Dorothy Roberts. Photo courtesy of the John D. and Catherine T. MacArthur Foundation.

Special to The Post

When grants were announced Oct. 1, it was noted that eight of the 22 MacArthur Fellows were African American. Among the recipients of the so-called ‘genius grants’ are scholars, visual and media artists a poet/writer, historian, and dancer/choreographer who each receive $800,000 over a five-year period to spend as they see fit.

Their names are Ruha Benjamin, Jericho Brown, Tony Cokes, Jennifer L. Morgan, Ebony G. Patterson, Shamel Pitts, Jason Reynolds, and Dorothy Roberts. This is the eighth and last in the series highlighting the Black awardees. The report below on Dorothy Roberts is excerpted from the MacArthur Fellows web site.

A graduate of Yale University with a law degree from Harvard, Dorothy Roberts is a legal scholar and public policy researcher exposing racial inequities embedded within health and social service systems.

Sine 2012, she has been a professor of Law and Sociology, and on the faculty in the department of Africana Studies at the University of Pennsylvania.

Roberts’s work encompasses reproductive health, bioethics, and child welfare. She sheds light on systemic inequities, amplifies the voices of those directly affected, and boldly calls for wholesale transformation of existing systems.

This work prompted Roberts to examine the treatment of children of color in the U.S. child welfare system.

After nearly two decades of research and advocacy work alongside parents, social workers, family defense lawyers, and organizations, Roberts has concluded that the current child welfare system is in fact a system of family policing with alarmingly unequal practices and outcomes. Her 2001 book, “Shattered Bonds: The Color of Child Welfare,” details the outsized role that race and class play in determining who is subject to state intervention and the results of those interventions.

Through interviews with Chicago mothers who had interacted with Child Protective Services (CPS), Roberts shows that institutions regularly punish the effects of poverty as neglect.

CPS disproportionately investigates Black and Indigenous families, especially if they are low-income, and children from these families are much more likely than white children to be removed from their families after CPS referral.

In “Torn Apart: How the Child Welfare System Destroys Black Families—and How Abolition Can Build a Safer World (2022),” Roberts traces the historical, cultural, and political forces driving the racial and class imbalance in child welfare interventions.

These include stereotypes about Black parents as negligent, devaluation of Black family bonds, and stigmatization of parenting practices that fall outside a narrow set of norms.

She also shows that blaming marginalized individuals for structural problems, while ignoring the historical roots of economic and social inequality, fails families and communities.

Roberts argues that the engrained oppressive features of the current system render it beyond repair. She calls for creating an entirely new approach focused on supporting families rather than punishing them.

Her support for dismantling the current child welfare system is unsettling to some. Still, her provocation inspires many to think more critically about its poor track record and harmful design.

By uncovering the complex forces underlying social systems and institutions, and uplifting the experiences of people caught up in them, Roberts creates opportunities to imagine and build more equitable and responsive ways to ensure child and family safety.