Trump wants 3% GDP growth for America again. But can it stick this time?

Donald Trump has set his sights on a big target: 3% GDP growth for the United States. It’s not a new goal—it’s a throwback to his first term, where the same ambition took center stage. And here’s the thing: the math says it’s possible, at least for now.

Over the last nine quarters ending in September, the U.S. economy averaged 3.1% annualized growth in eight of them. Sure, the final numbers for the most recent quarter are still cooking, but early estimates suggest a more modest 2.45%.

The problem isn’t whether 3% is achievable today, it’s whether the country can keep that momentum going. Long-term, consistent growth of that magnitude is a whole other beast. And that’s where the real debate begins.

The challenge of sustainable growth

Most economists agree that the U.S.’s “potential” GDP growth sits at around 2% per year. Potential GDP growth isn’t a guess—it’s a calculated number based on factors like labor force size, productivity, technology, and even immigration.

But here’s the catch: potential growth isn’t written in stone. It’s a model-based estimate, and if there’s one thing economists love, it’s debating their own models. Could the U.S. economy have untapped structural changes that could push potential growth higher? Maybe. But the consensus says don’t bet on it.

To see why 3% is such a tall order, look at the fundamentals. The labor force is a major piece of the puzzle. Growth in population, whether through immigration or higher birth rates, historically drove GDP expansion.

But America isn’t growing like it used to. Fertility rates have dipped, immigration has slowed, and an aging population means fewer workers overall. If you strip away population growth, those 3% glory days start looking a lot less likely.

A sustained extra percentage point of growth could mean huge gains: over $30,000 in additional GDP per household in today’s dollars by 2034. It could also put a serious dent in America’s growing debt-to-GDP ratio, shaving off 21 points in the same timeframe.

Policy levers: What it takes to move the needle

Hitting and maintaining 3% growth would require more than just wishful thinking. It demands deliberate policy shifts across several fronts. Some of the ideas floating around are bold, others are practical, and a few are downright tricky to implement.

Take business investment for instance. Encouraging companies to spend more on new ventures is a proven way to boost economic output. Tax cuts aimed specifically at incentivizing investment—like expanding tax credits for research and development or allowing businesses to fully expense investments—could do the trick.

Early analysis from economists suggests these types of policies could add around 0.2 percentage points to annual GDP growth. Not bad, but still not enough to close the gap on its own.

Then there’s immigration reform. A comprehensive overhaul—think expanded pathways to citizenship, better border security, and more slots for high-skilled workers—could add another 0.3 percentage points annually. It’s a politically charged issue, sure, but the economic math is crystal clear: more immigrants mean more workers, more consumers, and more growth.

Climate change, while often framed as an environmental issue, also has major economic implications. The Congressional Budget Office estimates that unmitigated climate damage could shave off at least 0.1 percentage points of growth by 2100. Investments to fight these impacts not only safeguard the economy’s future but also provide immediate growth boosts.

Labor force participation is another area ripe for improvement. While prime-age workforce participation rates have rebounded to early-2000s levels, there’s still untapped potential, particularly among women and men without college degrees.

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