INTERPRETING THE ECONOMIC REPORT CARD.

INTERPRETING THE ECONOMIC REPORT CARD. Kids, this very helpful article by Robert Samuelson in RealClearPolitics provides some background that is hard to come by on the recent performance of the US economy. Bear in mind that growth rates matter a lot in the long run. Using the rule of 72, a growth rate of 2% means the economy doubles in 36 years while a growth rate of 3% means it doubles in 24 years. Although we are accustomed to seeing quite high growth rates for short periods, over the long haul, 2% is can be considered as average, as shown here: (a terrific site from the Measuringworth Institute) the long term growth rate of per capita GNP for the United States is estimated at 1.73% for the period from 1790 to 2007; 1.93% for 1900 to 2007; and 2.07% for 1950 to 2007. Notice Samuelson’s point that even for a period as long as ten years, how you choose the starting and end years makes a big difference.