The U.S. Chamber of Commerce announced an initiative to help lawmakers prioritize the country’s economic growth over political tussles, warning that future generations could miss out on a prosperous life owing to slower growth rates.
Between 1950 and 2010, the United States averaged an annual real economic growth rate of 3.4 percent, even after factoring in recessions. Since 2010, the annual growth rate has dropped to 2.2 percent, with the rate projected to decline further to 1.8 percent in the coming decade, the Chamber said.
The difference between a 3 percent growth and 2 percent is massive, it noted. In an economy that grows at only 2 percent annually, a child born today can only double their living standard when their age hits the mid-30s. In contrast, a 3 percent growth rate would double the living standard the child is in their early 20s.
“Many Americans do not feel like the current economy is working for them. To create the future we want and the next generation deserves, we need to get back to growth,” said U.S. Chamber President and CEO Suzanne P. Clark.
“We need our elected officials to look beyond the next election and set targeted priorities for our collective future. Economic growth is not a red issue or a blue issue. It’s a red, white, and blue imperative.”
The 3 percent growth rate target should act as a “litmus test” when lawmakers evaluate policy measures for implementation, the Chamber said.
The association has identified key areas such as trade, housing, immigration, and jobs that can help the country achieve strong growth. It advocated for adopting policies that support and develop a larger pool of skilled workforce and encourage investments in cutting-edge technology.
America’s Economic Position
Projections for the U.S. global economic position over the coming decades have been mixed, with some expecting the country to drop in the rankings while others betting on the United States to remain dominant.The share of the United States in the global GDP is estimated to fall from 16 to 12 percent between 2016 and 2050. During this time, China’s share is projected to rise from 18 to 20 percent while India is estimated to see a jump from seven to 15 percent.
The race between China and the United States “will get closest towards the end of this decade but then fall away as structural problems continue to bite and the AI revolution propels U.S. growth.”
The report forecast China’s population to fall from 1.4 billion to 590 million by 2100. In contrast, the American population is expected to jump from 334 to 433 million, while the Indian population is projected to be around 1.5 billion.
CEBR expects India to be the biggest economy by 2100, with a GDP that is 90 percent bigger than that of China and 30 percent larger than the United States. America is expected to be in the second spot with a 45 percent bigger economy than China.
“Perhaps the most important conclusion is that China’s time at the top is likely to be very limited in duration and by the end of the current century it is likely to be at best only one of three superpowers and possibly the junior partner amongst the three,” CEBR stated.
