As a followup to my previous post: here is MIT Economist Brad DeLong explaining just how difficult it would be for the U.S. to acheive 5% economic growth:
For one thing, we'd need a significant increase in the number of Americans in the workforce, but:
The American working-age adult population in 2020 will on average be older than it was in 2000--and older people are less likely to want to work. Americans will spend more time in school in 2020 than they did in 2000--and adults who are in school aren't working. We won't see 64.7% again--not without big changes like raising the Social Security retirement age a lot, which aren't on Pawlenty's menu.
Nor will population growth help much here:
The Census projection sees the 18-and-over population growing at 0.88% per year, and the 18-to-64 population growing at 0.23% per year...
And there is little to suggest that productivity growth can make up for this:
We just had such a transient early-recovery spike: 5 quarters during which productivity growth averaged 6.1% rather than 2.7%. We are unlikely to have such
a spike again in the next ten years. Subtract out the excess productivity growth above trend of this spike and we have a forecast of labor productivity growth over the next ten years of not 2.5% per year but 2.2% per year. Now that is significantly better than the 1.7% per year of 1981-2011--or the 0.9% per year of 1981-1995. But it doesn't get you to 5% per year.
All in all, a sober analysis by someone who knows what he's talking about rather than just promising every voter a pony and a gingerbread castle with a chocolate draw-bridge and a gumbdrop doorbell.