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The 4% Solution: Reaching Potential Through Growth

Brendan Miniter, Philadelphia Inquirer Economic growth is not an issue normally associated with the Pentagon. But on Jan. 23, 2006, officials there...

Brendan Miniter, Philadelphia Inquirer Economic growth is not an issue normally associated with the Pentagon. But on Jan. 23, 2006, officials there handed the Defense Department's Distinguished Public Service Award to then-outgoing Federal Reserve Chairman Alan Greenspan. The reason for the award: He helped unleash tremendous economic growth that had strengthened the country, led to new advances in science and technology, and demonstrated the power of a free and open economic system.The importance of economic prosperity is hard to overstate. A growing economy produces jobs that allow workers to provide for their families, live comfortable and stable lives, and give back to their communities. A growing economy creates new opportunities for entrepreneurs. And it also creates the capital needed to support innovation and research in science and the arts.

From the end of World War II until our recent "Great Recession," the United States economy grew, on average, at a little more than 3 percent annually. At that rate the size of the economy doubles roughly every generation. There were, of course, recessions during that period. But nearly every economic downturn was followed by a period of significant growth. Over the last 70 years, the American economy has grown at 4 percent or greater about two-fifths of the time. The result has been a rapid transformation. Today most Americans have a substantially higher standard of living than previous generations.
 
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