In round numbers, the United States has averaged growth of about 3 percent gross domestic product since World War II. What would happen over a lifetime of 78 years if this average were to drop to 2 percent? You would experience a 53 percent drop in the economic improvement you would expect to see over your lifetime as compared to what your parents saw. This lost growth would manifest itself in numerous ways, but basically it would mean you would not see the same improvement in quality of life or life expectancy that your parents saw.
Wait — it gets worse. You could make a very good case for 1 percent growth going forward, but not 2 percent or even 3 percent. An aging population means fewer people employed. A dysfunctional immigration system means fewer legal immigrants, and considering the dysfunctional education system, a decline in productivity is not too hard to imagine.
Of course, 1 percent growth is better than zero percent, which was the case throughout human history before the Industrial Revolution. If you are young and think you can fix your predicament with a tweak of marginal tax rates on the rich, well, good luck with that. This is your sustainable, environmentally friendly, politically correct future you just got socked with and probably got duped into voting for (assuming you are old enough to vote).
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By Douglas Holtz-Eakin
The young drop coverage to avoid higher premiums