Washington Needs to Get Real About Growth

Stop trying to place a thumb on the scale

When budget debates in Washington reach an impasse, the variable that gives comfort, albeit false, is economic growth. Small adjustments to annual real GDP growth projections can move 10 year budget forecasts dramatically.

So, when I read this morning about a White House meeting yesterday with the President and his economic advisors with leading Republican Senators, it was more than a little disconcerting to hear reports that, Kevin Hassett, the President’s National Economic Council Director thinks annual growth of over 4% can be achieved if the Big Beautiful Budget Bill is passed. Even more concerning was a report that President Trump believes growth will come in around 4.6%.

The reason this is disconcerting is because since 2000, over the past 25 years, GDP growth in the U.S. exceeded 4% only once. It occurred coming out of the COVID recession reaching 5.9% in 2021.

Further, when looking at projections over the next five years from leading forecasters, the rate of annual real GDP growth in the U.S. is projected to be between 1.6% and 2.1%.

As the debate on the budget bill in the Senate continues throughout this month, check and see just how realistic the growth expectations are over the next several years.

Also, remember coach Vince Lombardi’s admonition, “hope is not a strategy.”