Earlier this week, the White House Council of Economic Advisers released its annual Economic Report of the President. “Claims that America’s economy is in decline or that we haven’t made progress are simply not true,” President Obama wrote in the foreword. The body of the report touted the 13.8 million jobs the economy has generated since the Great Recession, and projected that the gross domestic product, a measure of all the goods and services that the economy produces, would expand by 2.7 per cent this year, its fastest rate of growth in a decade.

That was the good news. In the body of the report and the accompanying statistical tables, however, the authors acknowledged that, in terms of output, productivity, and wage growth, the recovery, which began in the middle of 2009, has been a disappointment. Over the past six years, G.D.P. growth has risen at an annual rate of 2.1 per cent. That compares to average growth rates of 4.6 per cent during the six years after the recessions of 1980–1982, 3.6 per cent in the six years after the recession of 1990–1991, and 2.7 per cent after the recession of 2001.

One reason why the economy isn’t growing as much as it did after past recessions is that the labor force isn’t expanding as rapidly as before. The population is aging, and more Americans are retiring. But that is only part of the story. Productivity growth, which is the ultimate source or rising wages and incomes, has also slowed down—a lot.

Since the end of 2007, the peak of the last business cycle, output per hour has grown at an annual rate of just 1.4 per cent. That compares to an average growth rate of 2.2 per cent between business-cycle peaks in the period from 1953 to 2007. In the past five years, productivity growth has been even more disappointing. Since the fourth quarter of 2010, the President’s report says, it has averaged just 0.7 per cent, barely a third of the historical average. Since productivity and wages often move together, it is not surprising that wages have also been stagnant. In the past five years, inflation-adjusted average weekly earnings have grown at an annual rate of just 0.6 per cent. (They did perk up a bit last year, when they grew by about 2.5 per cent.)

It is worth keeping this picture in mind when considering the brouhaha over Bernie Sanders’s economic program, which has been engaging the economics blogosphere for the past week or so. In case you’ve missed it, a number of prominent economists, including four previous chairs of the Council of Economic Advisers, have poured scorn on a paper by Gerald Friedman, an economist from the University of Massachusetts, Amherst, which suggested that Sanders’s tax and spending policies, if enacted, would produce a huge leap in output, wages, and productivity.

How huge? Friedman’s paper claims that, over the next ten years, G.D.P. growth would average 5.3 per cent, labor productivity growth would average 3.3 per cent, and median wages—the wages earned by the household in the very middle of the income distribution—would rise at an annual rate of 3.5 per cent. By 2026, per-capita G.D.P. and median household income would be more than a third higher than they are now. The poverty rate would fall to its lowest level ever—six per cent. The federal budget would be in surplus.

When I read about the rumpus, on my vacation last week, my first instinct was to side with the skeptics. In the history of national income accounts, the government bookkeeping system that dates to the late nineteen-forties, there has never been a ten-year period in which G.D.P. growth averaged 5.3 per cent. To find such a period, you have to go back to the decade after the Great Depression, 1934 to 1943, when the New Deal and the huge military build-up to the Second World War produced near double-digit rates of growth.

At the outset of that economic boom, about a quarter of all workers were unemployed, and many factories and offices were idle. Today, even if you don’t trust the official unemployment rate, which stands at 4.9 per cent, it is hard to argue that anywhere near as much spare capacity is available to be mobilized. And if the human and physical resources aren’t there to support supercharged rates of growth, the only other way it can be achieved over a lasting period is by unleashing an unprecedented decade of productivity increases.

Having read Friedman’s paper pretty carefully on my return to the United States, I remain deeply skeptical of his projections for G.D.P. growth and productivity. But his analysis, which isn’t an official campaign document, was well worth spending some time with. For one thing, it is the first effort I have seen to quantify how some of Sanders’s proposals, such as raising the minimum wage to fifteen dollars and sharply raising taxes on high earners, would reduce income inequality. Friedman outlines a compelling scenario under which the ratio of the average incomes of the richest five per cent of households to the poorest twenty percent would fall from 27.5 to 10.1. And this estimate doesn’t hinge on his own macroeconomic assumptions—it mainly reflects explicit efforts to boost the wages of low-paid workers, and to redistribute post-tax incomes.

In addition, Friedman makes a valuable contribution to the debate about how we can escape from the New Normal, or secular stagnation, or whatever other label you want to attach to our era of seemingly permanent low growth. To repeat: I think Friedman overstates the likely impact of Sanders’s policies. But he offers a timely reminder that economic growth rates aren’t set in stone, and that changes in policy—particularly those that seek to boost overall demand—can have a substantial impact, even when the official unemployment rate isn’t particularly elevated.

Right now, unfortunately, the economy is trapped in a self-reinforcing cycle of slow G.D.P. growth, inadequate investment (public and private), and stagnant wages. As Larry Summers and others have pointed out, public-sector investment is running at, or near, historic lows. Corporations, seeing little sign of rising demand for their products, are failing to invest in new capacity—preferring, in many cases, to return profits to their shareholders in the form of dividends or stock buybacks. Last year, according to the Economic Report to the President, real business fixed investment rose by just 1.6 per cent—less than G.D.P. When companies don’t invest in new capacity, their employees don’t get new technology to work with and productivity growth tends to lag. Low productivity growth, in turn, acts as a drag on wages and demand.

To break out of this low-growth trap, the economy needs policies designed to boost demand and push it onto a higher growth path: one in which rising investment, higher levels of productivity, rising rates of participation in the labor force, and higher wages all reinforce each other. With these conditions in place, companies would have more of an incentive to make capital investments, and as the price of labor rises they would also have an incentive to innovate and move up the value chain. Realistically, we can’t expect 5.3-per-cent G.D.P. growth and 3.3-per-cent productivity growth to persist for a decade. But we don’t necessarily have to settle for the 2.1-per-cent G.D.P. growth we’ve become accustomed to, or even the 2.3-per-cent rate that the Council of Economic Advisers has identified as its long-term potential. The U.S. economy has the resources and the ingenuity to do better than that.