Princeton economist Alan Blinder explained on Diane Rhem’s NPR podcast that the U.S. population is growing at just 0.3% when explaining why the Trump budget projections of 3% GDP growth are way off. Actually, it it is his numbers that are way off as the population has been growing at 0.8% since 2009.
Blinder on why historical 3% growth is impossible (16:20):
“Let me give you one reason and that is arithmetic, which he should understand, which is that our population growth is a lot lower than it was back then. If you go back to the 3% growth period, population growth was on the order of 1.2%, or something like that. Now we’re down to .3% per annum. That takes a whole point off the growth rate – nine tenths of a point. It’s just arithmetic! You don’t have a country with negligible population growth as the same country with when it has *high* population growth. You don’t need to study economics to understand that.”
But this is wrong in both directions.
Population growth was about 1.0% in the 70s, 0.9% in the 80s, 1.1% in the 90s, 0.9% from 2000 to 2008 and .8% from 2009 to 2015.
So the actual drop is from 1.0% to 0.8%, a 0.2% point drop, not the 0.9% drop Blinder claims.