When the George W. Bush Institute commissioned Nobel-winning economist Edward Prescott to analyze its proposal to generate 4 percent annual growth for the U.S., the famously pro-free-market Prescott replied that a target of 3 percent was better for the long run. Prescott isn't alone in his evaluation; most economists and policy specialists don't believe that the U.S. economy can grow at 4 percent in the long run, no matter what policy steps we take. I've added my voice to that skeptical chorus on more than one occasion after Jeb Bush embraced the 4 percent target.
Here's the thing, though -- it isn't quite true. There actually is one way that 4 percent long-term growth -- or even higher -- is possible. But there's a good reason I haven't mentioned it before now. It has about as much chance of happening as a snowball has of surviving an extended trip to Hades.