During the presidential campaign, Trump promised growth of 3.5% a year, and sometimes even 4%. There’s no disagreement that a sustained growth rate of this magnitude would be a significant achievement. Over the past decade, the economy has grown at an average of about 2% a year. The Congressional Budget Office forecasts an annual average of about 1.9% well into the next decade.
The U.S. hasn’t had sustained real annual growth (that is, over inflation) of better than 3% since the 1990s, with a brief spurt in 2004 and 2005. Making up the difference from 2% to more than 3% looks like a pipe dream.
In fact, the only place one can find confidence about a growth rate of 3%-plus is inside the Trump administration, where Treasury Secretary Steven Mnuchin says it’s “very achievable.” But he would say that, wouldn’t he? After all, Trump’s economic doctrine is dependent on it. Without such growth, Mnuchin’s promise that the Trump-backed tax cut would “pay for itself” is a fantasy.