Yesterday, McCain spokeswoman Nancy Pfotenhauer responded to our analysis showing that McCain could eliminate 10 government agencies and still not balance his budget by 2013. Watch it:
Her argument? That McCain could balance his budget, which includes a doubling of Bush’s tax cuts for corporations and the wealthy, through a combination of spending cuts and economic growth.
But some quick calculations show that to balance his budget the economy would have to grow by a blazing 8% a year between now and 2013.
That annual growth rate is faster than any the U.S. economy has experienced since 1950, and faster than any economy in the G7 (which includes Germany and Japan) has grown since 1970. And to balance his budget, McCain needs it to happen five years in a row.
The last time the Unites States experienced 5 years of growth that fast was between 1939 and 1944 when growth averaged 12.8% per year.
Put simply, the only way McCain could achieve that kind of growth is to start World War III.
UPDATE: An alert Wonk Room reader noted that we were comparing McCain’s needed growth rates to inflation adjusted growth rates instead of nominal growth rates (which is the proper historical comparison to make). The point remains, however, that a growth rate of 8% for five years in a row is wildly unrealistic. Nominal growth rates have never achieved such a stretch since the late seventies when inflation accounted for most of the growth. This post’s title and the accompanying chart have been removed to reflect this change.
Read methodology and calculations after the jump. Read more