ECONOMIC GROWTH TRENDS IN THE UNITED STATES* by Dexter M. Keezer In making these projections of our gross national product, we are abundantly aware of the fact that we are not taking a photograph of things surely to come. There may be some limitations of these projections as sure-fire forecasters of which we are not aware, but I doubt if there are many.
Also, as a result of our continuing studies of economic growth and stability, we are equally aware of the limitations of the gross national product as a measure of economic growth. In a paper on economic growth and stability submitted to your Subcommittee on Tax Policy some time ago, I remarked that, "As a measure of our Nation's economic growth, the gross national product . . . leaves a great deal to be desired," and expanded on that point.
By way of multiplying the complications of work on which your subcommittee is embarked, we have the added fact that there is still a wide range of disagreement about what we are actually talking about when we talk economic growth. Herbert Stein, acting director of research of the Committee for Economic Development, recently summed up the difficulty by remarking that "there is no . . . accepted convention of what we mean by growth. We talk about increases in output, capacity to produce, resources, consumption, in the aggregate, per capita, per unit of output or per man-hour . . . and there is no agreement on which concept of growth we really mean when choice is necessary." In spite of limitations of the sort I have emphasized, I believe that the sort of projections I am presenting perform a useful role. They provide a rough gage of the growth potentials of our economy over the years ahead; and for governmental and business purposes a rough gage is better than none.
I shall indicate the more limited assumptions which are embedded in the projections as I run through them. Of the general assumptions on which they are based the most crucial, of course, is the assumption that we are going to manage to avoid blowing up the world with atomic bombs. If that assumption is no good, these projections involve a completely bootless enterprise.
Now, I propose to run through the projections, most of which I have put in chart form for your convenience, and indicate where they and how they were put together.
In chart 1 we have calculated the gross national product of the United States for the years 1950, 1955, 1960, 1965, and 1970 in the standard manner. The calculations for the years 1950 and 1955 are made from the record. The calculations for the years ahead are based on estimates which are explained in charts to follow. The nature of the calculation is indicated on the face of the chart.
Chart 2 shows our estimates of prospective population growth, and prospective distribution of the population in major economic groups. Our overall population figures are based on the highest estimates of the United States Bureau of Census for the years 1960, 1965, and 1970. These estimates are taken directly from Census Bulletin P25, No. 123, dated October 20, 1955. In the past, the Census Bureau estimates have undershot the mark. One reason why we used the high side of the Census estimates of population growth is that these estimates have not assumed any additional decline in the death rate. The spread between the highest and lowest Census estimates of the population in the year 1970 is 13 million, all accounted for by varying estimates of the number of those under 15 years of age.
For our estimate of the labor force age group, we used the Census projection of the number of persons 15 and over. Since all the people who will reach this age by 1970 have already been born, their number can be projected with some assurance, and the Census provides only one estimate of the number for each of the years 1960, 1965, and 1970. Next, we have tried to estimate how many of these people will actually be at work—or looking for work—in each of the years under consideration. These people will make up the active labor force, a group that includes all those employed, or seeking employment, in military or civilian jobs. Among persons 15 and over there will also be many housewives, students, and retired persons; these do not count in the labor force.