The article reports:
The CBO updated its fiscal projections Wednesday, and they reflected its new gloomy view that the future of the U.S. economy is one of slower growth and lower productivity.
“They think that we will get back up to potential growth,” said Loren Adler, an analyst at the Committee for a Responsible Federal Budget, “but they make it clear that they think potential growth is lower than it used to be in the ‘80s and ‘90s.”
The CBO first reached the conclusion that future growth will be slower when it released its long-term budget projections in July, but only incorporated it into its official 10-year budget projections Wednesday.
In its new projections, the CBO sees the economy suffering from a scenario in which its potential is slightly lower than before — 1 percent lower in 2024 than previously expected.
As a result of weak economic growth this year and slightly slower potential growth over the next 10 years, the CBO sees $514 billion in lost revenue.
…The CBO’s scenario — slower growth and permanently lower interest rates — is consistent with the “secular stagnation” scenario outlined by former Obama economic adviser and Harvard professor Larry Summers, who has argued that the U.S. economy may not be able to generate enough consumer demand for goods and services on its own without stimulus from the Federal Reserve or through federal spending.
The assumption that demand will return to normal “now seems problematic,” Stein (Center for American Progress’ Harry Stein) told the Washington Examiner, noting that he wasn’t sure whether the CBO assumed secular stagnation in its model.
So how do you grow an economy? Ronald Reagan seemed to have the answer–lower taxes. If you look at the deal that President Reagan made with Congress (a Democrat-controlled Congress), Congress was going to cut spending along with the tax cuts. Unfortunately, Congress chose to ignore their part of the bargain, and spending during the Reagan years increased greatly and deficits went up despite record tax revenues coming into the government. Even with the growing deficits, the economy grew rapidly once the tax burden was taken off of the people who create jobs and produce wealth. The Obama Administration has increased the income of the wealthy while leaving the middle and lower classes behind. This is the fruit of crony capitalism. The gap between rich and poor has increased during the Obama Administration–not decreased. If you want to see America prosper again, elect people to Congress who will cut taxes and cut spending.