Economic Growth

Economic growth measures whether the country is producing and earning more over time, and it shapes nearly everything else in government and household life, from tax revenue to job availability to the price of everyday goods. Government does not create growth directly, but it shapes the conditions that make growth more or less likely through spending, regulation, trade policy, and the stability of the rules businesses and workers plan around.

Who sets the direction. Several federal bodies compete and cooperate to influence economic policy, each with different tools and different masters. Understanding how they divide responsibility helps explain why economic messages from Washington sometimes seem to pull in different directions, a tension covered in The National Economic Council vs. Council of Economic Advisers and in How Treasury, Fed, and CEA Work to Shape America’s Economy.

Predictability as a policy goal. Businesses invest and hire based on expectations about taxes, regulation, and trade rules; when those expectations shift unpredictably, growth often suffers even if no single policy is bad on its own. This idea, and why economists and policymakers across the spectrum tend to agree on it even when they disagree on specifics, is explored in Why Policy Stability is Critical for Economic Growth.

Where growth gets built. Growth is not only a national statistic; it happens in specific industries and specific places. Government support for manufacturing, tools that cities and regions use to plan their own economic futures, and workforce contributions from immigration all factor into how growth is distributed. See How the Government Supports American Manufacturing, A Guide to Creating a Comprehensive Economic Development Strategy (CEDS), and The Economic Case for Immigration: What the Data Shows About America’s Workforce.