The most recent report on U.S. third-quarter gross domestic product (GDP) growth estimates that the U.S. economy rose by 3.3% year over year. President Donald Trump sees no reason that growth won’t nearly double to 6%.
In remarks to at a Wednesday meeting of his cabinet, the president said, “So, we’re at 3.3% GDP. I see no reason why we don’t go to 4%, 5%, and even 6%.” His optimism may be thrilling, but if history is any guide, that optimism is more likely wishful thinking.
Most estimates of U.S. economic growth are forecasting rates of around 2%. The Congressional Joint Committee on Taxation (JCT) has projected the GOP tax plan, if passed, will add about 0.8% to the current forecast for GDP growth. The historical average over the past 30-years is around 2.5% and the last time U.S. GDP grew by 6% was 1984.
The president’s 6% figure is actually lower than the numbers he tossed around in an August speech in Missouri. According to CNBC the president told his audience:
In the last 10 years, our economy has grown at only around 2 percent a year. You look at other countries and you look at what their (gross domestic product) is, they’re unhappy when it’s 7, 8, 9 [percent].
And I speak to them, leaders of the countries, how are you doing? ‘Not well, not well.’ ‘Why?’ ‘GDP is down to 7 percent.’ And I’m saying, ‘We’re hitting 1 percent.’
CNBC did a little fact-checking and found just seven countries with annual GDP growth rates of 7% or more in 2016. Here’s the list, along with the GDP and the annual GDP growth rate:
- Nauru: GDP of $110 million; 10.4% growth rate
- Iraq: GDP of $192.7 billion; 10.1% growth
- Ethiopia: GDP of $79.7 billion; 8.0% growth
- Uzbekistan: GDP of $67.5 billion; 7.8% growth
- Côte d’Ivoire: GDP of $39.9 billion; 7.5% growth
- Iceland: GDP of $24.85 billion; 7.2% growth
- Cambodia: GDP of $22.3 billion; 7.0% growth
Excepting Iraq, how likely is it that Trump called the leaders of any of the other six?
For the record, U.S. GDP in 2016 totaled $19.4 trillion, of which 2% is equal to about $388 billion.