United States economic data continue to surprise to the upside, revealing ongoing resilience despite looming uncertainties and persistent shocks. Gross domestic product is expected to expand by 2.6 percent year-over-year in 2024. Some moderate growth at year-end and early next year may constrain annual 2025 growth to 1.7 percent despite expectations of stronger quarterly annualized growth over that year.
Yet many Americans today feel the economy is not working for them. Rising prices and unaffordable housing have made it difficult for families to thrive, while government debt continues to climb without a clear plan for stabilization. To ensure a prosperous future for the next generation, we must advocate for policies that significantly boost economic growth.
Economic growth isn’t merely a statistic — it reflects the lives of everyday people. It encompasses their ability to provide for their families and their hope that their children will enjoy a better quality of life. This growth fuels the American Dream, which posits that hard work can lead to upward mobility, regardless of socioeconomic background. Sustained growth enhances overall quality of life, increases incomes, and fosters innovation.
Unfortunately, many of the factors that previously supported robust economic growth from 1950 to 2010 have faded. During this period, the U.S. economy expanded at an average rate of 3.4% annually, leading to a significant increase in living standards. Today, however, growth has averaged only 2.2% since 2010, with projections from the Congressional Budget Office suggesting it may drop to just 1.8% over the next decade.
The decline in growth rates can be traced to several factors. Post-World War II, America transformed its military production capabilities into domestic manufacturing, spurring economic activity. Additionally, the baby boomer generation entering the workforce from the 1960s to the early 1980s expanded the labor pool, while a significant increase in female workforce participation helped drive growth. However, as the youngest baby boomers retire, these growth tailwinds are diminishing.
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For the American Dream to endure, we need a recommitment to growth. The U.S. Chamber of Commerce is calling on elected officials to adopt the Growth and Opportunity Imperative, aiming for at least 3% annual economic growth. Achieving this goal is critical, as it will ensure that individuals born today see a doubling of the economy by their early twenties, rather than waiting until their mid-30s.
Robust economic growth is essential for addressing rising federal debt. High deficits are a legitimate concern, but enhancing productivity to achieve even a modest growth increase can significantly mitigate this issue. For instance, raising growth from 2% to 2.5% could reduce the federal deficit by $1.2 trillion over the next decade. Conversely, if the economy stagnates, the deficit could rise by the same amount.
Public policy plays a crucial role in facilitating economic growth. While previous economic tailwinds allowed for growth despite poor policies, today’s environment demands proactive and strategic public policy. To create better opportunities for Americans, we must implement policies that expand the workforce and enhance skills, invest in innovation and cutting-edge technology, and embrace future economic trends, providing businesses with the certainty needed for growth.
Policymakers should adopt a clear goal of at least 3% annual real growth over the next decade, effectively increasing growth expectations by 50%. This benchmark should guide policy decisions and serve as a measure of success.
The pathway to revitalizing America’s economy is clear: prioritize economic growth. By implementing targeted policies, we can accelerate progress, improve the lives of citizens, and foster a brighter future. The time for action is now; the prosperity of future generations depends on our commitment to creating a thriving economy today.
Chris Romer is president & CEO of Vail Valley Partnership, the regional chamber of commerce. Learn more at VailValleyPartnership.com.
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Publish date : 2024-11-28 04:25:00
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