Is Sustained 4 Percent Annual Real Growth Achievable?
In response to a question about his plan for 4 percent economic growth, former Gov. Jeb Bush said, “We’ve done it 27 times since World War II. I think we need to lift our spirits and have high, lofty expectations for this great country of ours. The new normal of two percent that the left is saying you can’t do anything about is so dangerous for our country.”
He is correct that the U.S. has had annual growth of 4 percent 27 times since World War II, most recently in 2000. It is certainly possible to achieve 4 percent growth in a single year, but judging by the quote, he indicates that he would aim to achieve 4 percent growth on a sustained basis. The longest stretch of 4 percent growth in the post-WWII era was in the 1960s, when growth reached 4 percent for five years in a row and six out of seven years. As we noted in our 16 Myths document, the last time the U.S. had 4 percent growth on average for 25 years was 1940-1964. And in the modern context with an aging population and a large percentage of women now already in the labor force, pursuing a number of pro-growth policies mentioned would only achieve about 3 percent real growth at best over the long run. Therefore, it would be very difficult to achieve sustained 4 percent annual real GDP growth.