Living in an Economic ‘Twilight Zone’
By Dan Celia
In a White House press briefing last week, Treasury Secretary Steve Mnuchin made numerous comments about the economy and where things are going. One reporter asked about the national debt. Mnuchin answered by referring to the incredible growth the country is experiencing, which he said is likely to continue. Mnuchin also mentioned the positive impact of less regulation and tax reform.
There’s no denying that this economy is on track for growth like we haven’t seen for more than 15 years. Keep in mind that, with GDP alone, we hadn’t seen a 3 percent increase for 12 years (it hit 3.3 percent for the third quarter of 2017). I would agree with Mnuchin that growth will go a long way to help reduce the national debt. But the idea that growth alone will get our national debt in line is naïve at best.
I couldn’t help but think that this is a man who is likely a pretty good businessman. Yet, he remains a bit out of touch with what is necessary for sustained economic growth. I am reminded that we have had Democrats and Republicans in Washington, D.C., who for a long time have lived in an altered universe. They rationalized that we could either spend our way into prosperity, or come up with clever ways to grow our way into total prosperity while ignoring our debt. In either scenario, depending on the party in control, we would supposedly solve all of our debt problems, labor participation problems, and concerns about wages and inflation.
(This post originally appeared on townhall.com | Image from townhall.com)