THE PRESIDENT CAN WRITE, BUT CAN HE DO MATH?

PRESIDENTIAL MATH: Our Future Depends On It

President Obama’s promise to cut the federal deficit in half in his first term relies on his assumption that the real Gross Domestic Product (GDP) will grow 3.2% next year, 4% in 2010, and 4.6% in 2012. We know he can write, but can he calculate?

He did not tell us how he calculated future GDP so let’s ask if history says his results, and thus the future hope he promises, is reasonable.

Since 1930 the average annual growth rate of GDP was 3.4%, and that included three years of WWII when it was over 17%. If we begin in 1945 average Real GPD increased 3%. In the nine years and 36 economic quarters from January 2000 through December 2008 real GDP grew faster than 3% in only 9 quarters. (All figures from US Bureau of Economic Analysis)

Conclusion: President Obama rests his economic plan on the calculation that real GDP for the three years starting in January 2010 the economy will grow faster than its 64 year average since WWI and that it will consistently grow faster than it did in 25 or the last 36 quarterly reporting periods. If the President would show us how he did his math, we would know whether we should call that math presidential or political.