U.S. Economic Growth 1870–1913: No Federal Reserve, No Keynes' General Theory = 4.05% Annual GNP Growth for 44 Years

No Federal Reserve, no income tax (except 1870 - 1872 and 1894-1895), no Export-Import Bank, no HUD, no Small Business Administration, no Keynes' General Theory, no Department of Health and Human Services, no EPA, no OHSA, and no Department of Energy plus thousands of government strangling agencies that didn't exist. Here's the data on economic growth from 1870 to 1913. Take a look here at the data. Few historians, and fewer journalists understand that economic growth was much higher before the government messed things up. Just a reminder , the data comes from economist Christina Romer from an article published in the Journal of Political Economy (one of the most prestigious journals in economics).Christina Romer can hardly be labeled a proponent of laissez-faire. We can only conclude, Barack Obama's economic legacy is a grand failure with its' inability to yield a single year of GDP growth of 3%.

Year GNP* Growth Rate
1869 75.609
1870 $76.464 1.13%
1871 $76.952 0.638%
1872 $89.605 16.4%
1873 $94.863 5.86%
1874 $96.205 1.414%
1875 $97.684 1.53%
1876 $104.628 7.10%
1877 $110.797 5.89%
1878 $118.906 7.31%
1879 $127.675 7.37%
1880 $139.990 9.64%
1881 $143.580 2.56%
1882 $149.307 3.98%
1883 $152.097 1.86%
1884 $155.684 2.35%
1885 $157.789 1.35%
1886 $164.375 4.17%
1887 $169.453 3.08%
1888 $168.940 -0.3%
1889 $175.030 3.60%
1890 $182.964 4.53%
1891 $191.757 4.80%
1892 $204.279 6.53%
1893 $202.616 -0.81%
1894 $200.819 -0.88%
1895 $215.668 7.39%
1896 $221.438 2.67%
1897 $233.655 5.51%
1898 $241.459 3.33%
1899 $254.728 5.49%
1900 $264.540 3.85%
1901 $284.908 7.69%
1902 $291.572 2.33%
1903 $306.239 5.03%
1904 $307.127 0.28%
1905 $323.162 5.22%
1906 $351.499 8.76%
1907 $361.920 2.96%
1908 $346.800 -4.17%
1909 $368.872 6.36%
1910 $383.888 4.07%
1911 $391.858 2.07%
1912 $407.112 3.89%
1913 $424.492 4.26%
* Billions of 1982 dollars

Average real GNP growth rate, 1870–1913: 4.05%.
(Romer 1989: 22).

Some comments:

(1) A comparison with the 1870–1900 average:

Average real GNP growth rate, 1870–1900: 4.17%.
Average real GNP growth rate, 1870–1913: 4.05%.

(2) The decade rates:

Average real GNP growth rate, 1871–1880: 6.32%
Average real GNP growth rate, 1881–1890: 2.72%.
Average real GNP growth rate, 1891–1900: 3.79%
Average real GNP growth rate, 1901–1910: 3.85%.

(3) The rate for 1901–1913:

Average real GNP growth rate, 1901–1913: 3.75%

(4) The figures show a severe recession in 1908, where GNP contracted by 4.17%.

BIBLIOGRAPHY

Romer, C. D. 1989. “The Prewar Business Cycle Reconsidered: New Estimates of Gross National Product, 1869–1908,” Journal of Political Economy 97.1: 1–37.