⏩ Trump’s 3% growth challenge

The president-elect's pick for treasury secretary, investor Scott Bessent, wants to accelerate, but it won’t be easy

Hedge-fund manager Scott Bessent, Donald Trump’s pick for US treasury secretary, is promoting what he calls a 3-3-3 plan: reduce the federal budget deficit to three percent of gross domestic product by 2028, produce an additional three million barrels of oil (or its equivalent) a day, and boost economic growth to three percent through deregulation (also playing the key role in deficit reduction).

The result, according to Bessent, would be “an economic lollapalooza.”

I will mostly focus on that last line, the effort to spur faster real GDP growth. Let’s start with some context to outline the challenge. Considering the long history of US economic growth, three percent might seem unambitious and quite doable. Since World War II, growth has averaged just over three percent, with half that growth coming from a growing labor force and half from increased worker productivity. So based on that history, Bessent is merely aiming for the US economy to grow as fast in the future as it has in the past.

Doesn’t seem so unreasonable, yes?

But here’s your trouble (or, rather, Trump’s and Bessent’s): US GDP has been a full point slower this century.