I highly recommend reading That Use to Be Us by Thomas Friedman and Michael Madelbaum. It is a really good overview of what it will take for us as individuals as well as a country to compete in a continuously flattening world driven by globalization and technology. They lay out in compelling – and often scary – detail the challenges that most of us as individuals and all of us as a country will need to deal with to be successful economically going forward. And how much sacrifice and hard work is involved from each of us and the country to regain our competitiveness.
One of their most important contributions is in laying out a framework for what we need and should want from government. What is the outcome we should hold elected officials accountable for. Their answer: “It is not simply to reduce the deficit but to insure prosperity.” Prosperity – a broad middle class and a realistic opportunity for all Americans to realize the American Dream – is what we should be holding our elected officials accountable for.
Do we need to deal with structural deficits by local, state and federal governments? Of course, But if we balance budgets at the local, state and federal level and the next generation of Americans are poorer than their parent’s generation is that success? Of course, not.
Friedman and Mandelbaum propose:
If we keep spending as we have in the past, we are mortgaging – indeed sabotaging – our nation’s future. But if we don’t spend on the right things, something we have generally done since the nineteenth century we are just a surely mortgaging and sabotaging our future. …. the purpose of the exercise: It is not simply to reduce the deficit but to insure prosperity. Solvency is vital, but it is not enough. To uphold American greatness the country will have to do more than get its debt-to-GDP ratio to a reasonable and sustainable level, although it will certainly have to do that. It will also have to equip its people with the skills and tools that have always been part of our formula for economic growth. Providing them will cost money and require long-term investment. To assure the nation’s economic future we will have to spend more, not less, on some things: infrastructure and research and development, and probably education as well. This will be especially difficult to accomplish at a time when valued programs are shrinking and taxes are rising: but if we do not invest in upgrading our formula, we will forfeit the indispensable condition for sustaining the American dream and maintaining American power in the world: economic growth. Anyone who says we can forgo spending of this kind does not understand either American history or the world in which we are now living.
In that paragraph Friedman and Mandelbaum have laid out the framework for public action. What we need to hold elected officials accountable for. The goal: prosperity. The path: both dealing with structural deficits and making public investments that are essential to growing the American economy and restoring the American dream.
Getting the goal right is imperative. There is no 3.0 agenda if the goal is not prosperity. Understanding that the path to realizing the goal is not an either/or choice, but rather requires both/and is also essential. Here and across the country we are having big trouble with both. Far too often “government living within its means” has become the goal, no matter whether it is good for the economy. And, of course, there is almost no elected official in either party willing to advance an agenda of program cuts, higher taxes, and more public investments in strategic assets. But as Friedman and Mandelbaum assert that is where we need to get if America is going to thrive in a flattening world.