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Tuesday, May 30, 2017

What History Tells Us About Trump’s Budget Fantasy

Larry Summers:

What history tells us about Trump’s budget fantasy: At the risk of beating a dead horse, here are some thoughts on the Trump administration’s 3 percent growth forecast. Zero interest rates seemed inconceivable 15 years ago, and yet they happened. Almost no one forecast the productivity boom that took place in the United States between 1995 and 2005 or the magnitude of the 2008 financial crisis. So any statement that a given forecast is inconceivable is unwarranted.
It is, though, reasonable to use history to try to gauge the likelihood of possible outcomes. I do not see how any examination of U.S. history could possibly support the Trump forecast as a reasonable expectation. ...

    Posted by on Tuesday, May 30, 2017 at 09:20 AM in Economics | Permalink  Comments (90)


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