After positioning himself as the candidate of tough choices, Tim Pawlenty drew widespread ridicule from experts across the political spectrum on Wednesday for his wildly optimistic economic plan.
Pawlenty unveiled his platform at a speech in Chicago, a combination of tax reforms and budget cuts that he said would yield an explosive economic recovery. The centerpiece of his proposal was setting a goal of 5% economic growth per year for a decade.
"Growing at 5% a year, rather than the current level of 1.8%, would net us millions of new jobs," he said. "Trillions of dollars in new wealth. Put us on a path to saving our entitlement programs. And balance the federal budget."
But a group of former CBO directors, who are chosen by Congress to analyze the budget from a nonpartisan perspective, are lambasting the number, saying it's completely out of line with any mainstream assessment of the American economy.
"The trend growth rate is not going to be 5% in the United States," Douglas Holtz-Eakin, director of the CBO under President Bush and a top GOP advisor, told TPM. "The market just doesn't support that. It just doesn't."
While a brief spurt of high growth is not uncommon coming out of a deep recession, sustained 5% growth appears a bridge too far. Pawlenty cited expansion periods under Reagan and Clinton as models, but neither president achieved comparable numbers -- in fact from 1980-2000 there was only one time in which growth surpassed 5% at all, a 7.2% boom in 1984 that immediately leveled off the next year.
"It's impossible" Robert Reischauer, former CBO director under Presidents Bush Sr. and Clinton and current president of the Urban Institute, told TPM. "You get growth because of investment, an increased labor force, a rise in human capital, and innovation. Add all those components together and they don't sum up to 5% given what the labor force is going to be and the investment possibilities are."...........