Countering the narrative that slow economic growth is “the new normal” for America’s economy, the Pacific Research Institute today released the first in a series of reports from its new study, Beyond the New Normal, which makes the case that future U.S. economic growth can meet –or exceed – past growth trends if the right economic policies are adopted.
“America’s economy has been stuck in neutral for so long that some economists claim that low growth rates are now the new normal,” said Dr. Wayne Winegarden, PRI Senior Fellow in Business and Economics, and co-author of Beyond the New Normal. “History has shown that when free-market policies are embraced, America’s economic engine roars. President Trump and Congress should adopt these policies that have proven successful in growing the economy and lifting more people out of poverty.”
Part 1 of Beyond the New Normal provides an overview of the case Winegarden and co-author Niles Chura will present arguing that free-market policies are needed to stimulate long-term, strong economic growth in the U.S.
Among the key points in Part 1 of their study:
- Average family income and average household income stagnated during much of the 1970s, and since 1999. Average annual real GDP growth has averaged just 1.89 percent since 2001.
- During times of slow economic growth, other negative trends, including slower average household income growth, greater income inequality, and increased poverty, have followed. These negative trends were reversed when the economy grew at a more rapid pace.
Strong economic growth occurs when there is a pro-growth policy environment in place that:
- Empowers the private sector to efficiently employ capital, labor, and technology;
- Discourages value destroying rent-seeking behavior; and
- Provides core public goods as efficiently as possible.
“Status quo thinking is holding back robust economic growth and keeping more Americans stuck in poverty,” said PRI President Sally Pipes. “In this and subsequent volumes, Wayne and Niles make the compelling case that the President and Congress must instead embrace proven, free-market policies if we are to return America to the days of strong and sustained economic growth.”