About the Economic Growth Program
The spread of new technologies and production practices, along with a worldwide abundance of capital and labor, have created the conditions for rapid world economic growth and for a new era of rising global prosperity. Because of its inherent strengths, the U.S. economy could help drive this growth as well as benefit from the enormous wealth created by it. Strong economic growth in turn can help alleviate if not solve many of the most daunting problems confronting the United States, from our unfunded entitlements to our unmet social needs and fiscal imbalances.
But these new global economic conditions, along with changes in the U.S. economy, also call for rethinking the policies needed for promoting healthy economic growth and rising prosperity at home. Over the past decade or two, wages for much of the American workforce have stagnated and our productive tradable goods capacity has been eroded by new international competition. As a result, our economy is too dependent on debt-led consumption financed by rising asset prices and by capital from abroad. Future economic growth is also being undermined by under-investment in research and development, by the deteriorating conditions of our public infrastructure, and by an inadequately trained workforce.
The purpose of New America's Economic Growth Program is to develop an integrated strategy with specific policy proposals for overcoming these problems and for promoting widespread growth and prosperity.
The American Way of Growth: An Integrated Strategy
The Economic Growth Program recognizes that globalization and technological change are reshaping the American economy. But it also understands that many of the best American practices -- its system of technological innovation through government-funded research and development, its past world-class public infrastructure projects, its commitment to quality public education, its favorable tax policies and business climate, and its ability to maintain robust demand and create mass consumer markets -- are still relevant. The Program will prepare a series of reports showing how these various pillars of the American model can be adapted to meet the demands of today's world economy.
Maintaining America's Technological Edge
America's system of technological innovation is one of the keys to American wealth creation. Maintaining America's technological edge will be even more critical in the years ahead, as international competition increases and as more and more income is derived from patents and licenses. The Economic Growth Program will outline a strategy for improving America's system of technological innovation by identifying research and development priorities and by making recommendations for removing current obstacles to science and technology, especially in the areas of biotechnology, energy development, and the life sciences.
A World Class Infrastructure: Meeting Our Public Investment Needs
The U.S. economy suffers from a deficit in public investment in infrastructure, which has crippled the competitiveness of American-based companies and hindered job creation. The Economic Growth Program will survey America's most pressing infrastructure needs over the next decade, focusing on the investment that is most needed to relieve emerging bottlenecks to growth and to rebuild America's productive economy.
Sustaining Productivity Growth: Sector Specific Studies
The key to rising living standards is sustained productivity growth. As more workers leave the manufacturing sector, where productivity growth is high, the U.S. economy will need to overcome productivity bottlenecks in labor-intensive industries and service sectors, ranging from housing construction to education and health care to transportation and energy development. The Economic Growth Program will undertake a series of sector specific studies to show how new technologies and new professional practices can be adapted to increase productivity in each of these areas.
A Favorable Business Climate: Incentives for Investment and Job Creation
Economic growth benefits from a predictable business climate with proper government regulation and from a fair and efficient tax system. But American-based companies are increasingly being disadvantaged by rising health care and housing costs and by an overly complicated tax and regulatory system that inhibits both job creation and investment. The Economic Growth Program will put forward policies to reduce these burdens on American business while at the same time strengthening America's social contract.
Robust Middle Class Demand: Rethinking Macroeconomic Policy
Productivity increases more rapidly as the economy approaches full employment and as industries reach economies of scale, which then induces more investment and new applications of technology. Maintaining robust demand and full employment is thus one of the keys to future economic growth, especially in a world economy that has excess capital and labor. Together with New America's Global Middle Class Program, the Economic Growth Program will outline policies for sustaining robust demand and for growing mass consumer markets worldwide.
