July 14, 2017
Several news outlets have reported that the Congressional Budget Office (CBO) does not accept the Trump administration’s claims that its program will lead to a big surge in growth. It is worth mentioning in reference to this dispute that the “robots will take all the jobs” gang agrees with Trump in this dispute. Many people in the debate are probably not aware of this fact because it requires an understanding of third-grade arithmetic.
Economic growth is the sum of labor force growth and productivity growth. There is not too much dispute about the rate of growth of the labor force over the next decade, since it is mostly due to population growth. Apart from large changes in immigration policy, we can’t do much about the number of working-age people who will be in the U.S. over the next decade.
The main question in projecting economic growth is therefore the rate of productivity growth. CBO essentially projects that the slowdown of the last decade will persist, with productivity growth averaging roughly 1.5 percent annually. The Trump crew is betting on a more rapid pace of productivity growth, as are the robots will take all the jobs gang. After all, robots taking the jobs of workers is pretty much the definition of productivity growth.
So, there are many reasons for mocking Trump and his administration, but if any of the robots will take the jobs gang mock the Trump growth projections, they are showing their ignorance. They agree with Trump’s projections of more rapid growth, they are just too confused about the arithmetic and economics to know it.
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