The United States has the largest, most powerful economy of any single country in the world. Our gross domestic product – the value of all goods and services in the whole country – is more than double that of the next biggest economy, China. And the influence that the United States has on the world economy is huge. As economists like to say, when the U.S. sneezes, the world catches a cold.
The Wall Street credit crisis has just been the capper on a tough year for the economy. Rising gas prices have not only put the bite on drivers, they’re pushing up the cost of everything (because nearly everything you buy has to be shipped from somewhere). The crisis in the mortgage market has caused housing prices to plummet and foreclosures to rise. The stock market has taken a serious hit.
There are two issues here, and political candidates sometimes mix them together. One is how to respond to some specific problems the country is facing right now. The second is whether the U.S. economy, over the long term, is doing what most Americans want and expect from it.
Eight in 10 Americans complain about the state of the American economy these days, and this is usually the top issue for voters in an election. But this is one of the trickiest issues there is when it comes to making sure you give your vote to someone who will actually take the country where you want it to go. Almost every politician will be talking about how Americans are doing economically and offering up ideas to “help.” But before you leap – and as you wrestle with the three different approaches we’ve outlined in the Survival Kit – here are some ideas to keep in mind.
High energy prices and troubles in the mortgage market have put the economy at the top of most voters' agenda. There are many ideas about what to do, but here are three different directions a lot of politicians talk about. Consider the pros and cons and see what makes sense to you.
Keep taxes low and government involvement at a minimum so the free market can work
Focus on creating good jobs at home and securing a safety net for all Americans
Get the U.S. back on track to compete in the global economy
It’s private industry -- not the government -- that is the engine of economic growth and job creation, so the best thing the government can do is step back and give businesses the room they need to grow and compete in the global market. That means low taxes, minimal regulation and international free trade. When businesses thrive, they hire more people. When jobs are plentiful, wages go up and more and more Americans benefit from a growing standard of living. When America’s entrepreneurs, business people and investors have the freedom they need to create new, growing enterprises, our economy is the wonder of the world. Recessions do come along from time to time, and not all American businesses can or should be protected in the global marketplace. There may be some temporary job losses, but in the long run, the country gains far more than it loses. Our history shows that. Read More...
It’s time to redefine what we mean by a healthy economy. It’s not just economic growth and big profits for private industry. It’s when average people who work hard every day have secure, comfortable lives. The way things are now, the rich are benefitting most from economic growth; the people who run machines, provide services, clean offices and keep the economy going day to day can barely make ends meet. Even worse, average Americans are constantly at risk of losing ground -- of losing their jobs and pensions, and of being financially ruined if they have a major illness. It’s time to stop buying the argument that whatever’s good for business is good for the rest of us, because it’s not working. We won’t have a good economy until we have enough good jobs and a strong enough safety net that all Americans can earn a decent living. Read More...
We can’t stop the world from changing, so we need to get our act together to be the farsighted, competitive, sensible country that the United States used to be. That means getting our financial house in order by balancing the federal budget and becoming a nation of savers, not spenders. This means investing in research, technology, energy and education so the U.S. can compete effectively. Last and not least, it means educating our kids in math, science, technology and foreign languages and making sure they have effective schools and teachers. The government is over $9 trillion in debt, and as a country we spend more than we save. Our roads, bridges, utilities and communications are falling behind those of other nations. Our kids don’t do as well as those of many competing countries on math and science exams. Meanwhile, major U.S. businesses are predicting shortages of engineers and scientists unless we get our educational system up to par. Read More...
Here’s a sampling of what some influential people have said about the problem and some of the solutions that have been proposed.
"We have always known that heedless self-interest was bad morals; we now know that it is bad economics."
-- President Franklin D. Roosevelt
"By 2010 - - two years from now - - 90 percent of the world's engineers will live in Asia. Why is this so important? Because America's horn of plenty over the past century has been filled by our ability to innovate and create new technologies that spur economic growth and improve the quality of our lives. The race to stay ahead in the brain race is critical to our future world leadership and we need our government, our education system and the private sector to step up to the challenge - - big time."
--Xerox Corp. CEO Anne M. Mulcahy
"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."
Use our Citizen's Survival Kit to figure out where you stand on the issues – then use the news and e-mail addresses in Take It To The Next Level to stay engaged and tell our elected officials and other leaders what you want and what you expect them to do.
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