Wednesday, October 28, 2015

Per Person Annual Income of $50,000 versus $23,000 Is Why A Resumption of the Historical U.S. Economic Annual Growth Rate of 3.5% Must Be Job #1

It's the 3.5% growing economy, Stupid!

Or at least that's what should be on the minds of Americans these days.

Tonight the Republican candidates for the presidency will debate the economy on national TV.

Hillary Clinton, the sure to be crowned Democratic nominee, probably won't have a lot to say about economic growth anytime soon. Besides, what difference does it make?

Well, here's what difference it makes, Hillary. As Winning 2016: A GOP Focus on Growth clearly points out, 'Hillary Clinton and the Democrats can't defend Obama's indefensible economy' says this:

"Republicans will need a unifying message, and voters of all stripes want to see faster economic growth that will produce more jobs and higher wages. Mrs. Clinton will have to distance herself from Mr. Obama’s economic record of slow growth and increased income inequality while also appealing to his core supporters. . . .

Between 1950 and 2000, the U.S. economy expanded at an average annual rate of 3.5%. Since 2000, it has grown at about half that rate, just 1.7%. Stanford economist John Cochrane wrote this week on his blog that “if the US economy had grown at 2% rather than 3.5% since 1950, income per person by 2000 would have been $23,000, not $50,000.” Mr. Cochrane argued that robust economic growth is essential to meeting America’s coming challenges. “The amount of tax revenue our government has available to pay off debt and to pay the ballooning Social Security and health care expenses depends almost entirely on economic growth,” he wrote. “Larger tax rates can’t come close to raising that much money.”

Summing Up

Facts are stubborn things.

We can't expect the politicians to be successful by borrowing, taxing, spending or redistributing our way to prosperity.

Neither can we expect to achieve greater national prosperity and less income inequality without a strong and job creating domestic economy.

Growing the public sector and blaming the rich won't help the poor and middle class get jobs.

Only the innovative and competitive private sector can make that happen in any lasting way.

Income per person of $50,000 is greater than $23,000.

That's my take.

Thanks. Bob.

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