Can Tim Pawlenty really bring unemployment below zero?

Let’s start with what economic growth is. “Rules in economics should always be taken with a grain of salt,” says Jared Bernstein, a fellow at the Center for Budget and Policy Priorities and a former White House economist, “but the speed limit on growth is understood to be (roughly) the growth rate of productivity plus the growth rate of the labor force.”

We can go above the speed limit for a bit and below it for a bit. But over time, we stick to something near the speed limit. And the consensus estimate right now is that our speed limit is about 2.5-3 percent. Pawlenty’s promised 5 percent is almost double that. Alan Blinder, a former vice chairman of the Federal Reserve, ran the numbers for me. “Trend growth is three percent or so,” he wrote in an e-mail. “Five percent growth would be two percentage points higher, which should cut the unemployment rate by about one percentage point per year. So after 10 years, it will have fallen from nine percent to minus-one percent. Nice trick!”