Warren Buffett says worrying about a slowing economy is a mistake

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Warren Buffett Says Worrying About a Slowing Economy Is a Mistake

The third-richest person in the world says presidential candidates warning of a slowing U.S. economy are "dead wrong."

In a letter to Berkshire Hathaway shareholders, chairman and CEO Warren Buffett said that "the babies being born in America today are the luckiest crop in history."

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He said real GDP per capita –– an often-used stat that gauges economic growth without inflation –– has increased by "a staggering" 600 percent since he was born in 1930.

Government spending is counted in that measure though, with World War II having caused a huge increase. It's actually never dipped below its 1930 level since.

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Warren Buffett says worrying about a slowing economy is a mistake
Democratic presidential candidate Hillary Clinton listens as billionaire investor Warren Buffett speaks at a Clinton Grassroots Organizing Event in Omaha, Neb., Wednesday, Dec. 16, 2015. (AP Photo/Nati Harnik)
OMAHA, NE-DECEMBER 16: Billionaire Businessman Warren Buffett introduces Democratic Presidential Candidate Hillary Rodham Clinton at a Town Hall rally at Sokol Auditorium December 16, 2015 in Omaha, Nebraska. (Photo by Steve Pope/Getty Images
Democratic presidential candidate Hillary Clinton, accompanied by billionaire investor Warren Buffett, waves to supporters as she walks on stage at a Grassroots Organizing Event in Omaha, Neb., Wednesday, Dec. 16, 2015. (AP Photo/Nati Harnik)
Billionaire investor Warren Buffett speaks at an election event for Democratic presidential candidate Hillary Clinton, in Omaha, Neb., Wednesday, Dec. 16, 2015. (AP Photo/Nati Harnik)
Democratic presidential candidate Hillary Clinton laughs as billionaire investor Warren Buffett speaks at a Clinton Grassroots Organizing Event in Omaha, Neb., Wednesday, Dec. 16, 2015. (AP Photo/Nati Harnik)
Democratic presidential candidate Hillary Clinton stands with billionaire investor Warren Buffett, at a Clinton Grassroots Organizing Event in Omaha, Neb., Wednesday, Dec. 16, 2015. (AP Photo/Nati Harnik)
Billionaire investor Warren Buffett and his daughter Susie, listen to Democratic presidential candidate Hillary Clinton speak at a Clinton Grassroots Organizing Event in Omaha, Neb., Wednesday, Dec. 16, 2015. (AP Photo/Nati Harnik)
Billionaire investor Warren Buffett and his daughter Susie listen as Democratic presidential candidate Hillary Clinton speaks at a Grassroots Organizing Event in Omaha, Neb., Wednesday, Dec. 16, 2015. (AP Photo/Nati Harnik)
OMAHA, NE-DECEMBER 16: Billionaire Businessman Warren Buffett listens to Democratic Presidential Candidate Hillary Rodham Clinton at a Town Hall rally at Sokol Auditorium December 16, 2015 in Omaha, Nebraska. Clinton has the majority support among Democrats over Sen. Bernie Sanders of Vermont. (Photo by Steve Pope/Getty Images
Hillary Clinton, former Secretary of State and 2016 Democratic presidential candidate, greets attendees following an event with Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., not pictured, at Sokol Auditorium in Omaha, Nebraska, U.S., on Wednesday, Dec. 16, 2015. Buffet said at the rally that he was supporting Clinton's bid for president because they share a commitment to help the less affluent. Photographer: Daniel Acker/Bloomberg via Getty Images
OMAHA, NE-DECEMBER 16: Democratic Presidential Candidate Hillary Rodham Clinton greets supporters as she arrives at a Town Hall rally at Sokol Auditorium December 16, 2015 in Omaha, Nebraska. Clinton was introduced by Billionaire Businessman Warren Buffett. (Photo by Steve Pope/Getty Images
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Some critics have pointed out that comparing today's GDP to GDP 86 years ago might be oversimplified, given all the economic and political changes that have happened in between.

And looking to the future, the Congressional Budget Office predicts real GDP will grow by just over 2 percent through 2025. Many consider that relatively slow growth. That's around the same rate it's grown since 2010.

But Buffett argues growth around that 2 percent mark would raise America's real GDP by almost 35 percent 25 years down the road, leading to $19,000 per person added to the economy.

He said for a family of four, that's $76,000 a year. He's not really saying they'll be earning that money, though.

Instead, it's the value of the goods and services four people produce that will be worth $76,000 more for the economy a generation from now.

Critics of Buffett's analysis say productivity has declined as of late, and that monumental innovations, like antibiotics and refrigeration, which arguably caused the most economic growth, are unlikely to happen on the same scale in the next 25 years.

Buffett's supported Democratic candidate, Hillary Clinton -- and Berkshire Hathaway's holdings -- are pretty dependent on the U.S. economy, so he may have a vested interest in promoting a positive view.

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