Trump's Risky Prediction

The first rule for being a Wall Street stock analyst is never to predict both a share price and a date for it. Virtually all analysts give a “target price” for the stocks they follow, but they never specify when that price will be achieved because they realize it would be impossible to say. The same rule applies to Washington policymakers. Members of the Trump administration are edging closer to breaking the rule, and they may regret it.

Treasury Secretary Steven Mnuchin told the Wall Street Journal yesterday that America’s slow GDP growth over the past seven years resulted from Obama-era policies that this administration can reverse. “We think it’s critical that we get back to more normalized economic growth,” Mnuchin said. “More normalized economic growth is 3% or higher.”

Note that he wisely refused to say when we’d reach 3%. Virtually no private economist sees such rapid growth happening in at least the next decade; the Fed predicts long-term growth of only 1.8%. But other administration officials may be forced into attaching dates to highly audacious growth forecasts because next month the White House is scheduled to release a budget plan. If the plan features tax cuts, heavy infrastructure spending, a higher military budget, and no cuts to Social Security or Medicare, all without calamitous effects on the budget deficit – as it must if it’s to honor Trump’s campaign promises – then it will have to assume heroic growth rates. The administration is reportedly planning to assume exactly that in order to make its budget numbers work.

The risk is that by the time fiscal 2018 ends on September 30 of next year, five weeks before the mid-term elections, we’ll know whether those highly ambitious predictions came true on time. It’s a high-risk bet: Trump will be either an economic miracle worker or an irresponsible dreamer digging the U.S. into a fiscal pit.

The situation is similar regarding other Trump promises. Most of them don’t carry such firm deadlines, but September 30, 2018, allows a reasonable time for achieving them. Will manufacturing employment be higher or lower than it was on inauguration day? Will America be demonstrably safer? Will there be a wall? Will ISIS be destroyed?

Trump disproved the doubters when he won in November, and he could do it again. But it will be difficult, and the stakes are extremely high. After all, when business leaders make promises as specific as Trump’s, and fail to deliver, they get fired.

After some 400 issues, Power Sheet will become but a memory at the end of this week, and I will be devoting my time to the physical and digital pages of Fortune. On Monday, you’ll begin receiving CEO Daily, Fortune editor Alan Murray’s popular newsletter, if you don’t get it already. And while we’re on the subject, I urge you to consider signing up for some of our other newsletters, including RaceAhead, on how to take the lead in corporate diversity, and Trumponomics Daily, our all-new dispatch from D.C. You’ll find them and all our other newsletters here: https://fortune.com/newsletters/

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