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In his State of the Union speech last night, President Obama declared, “Anyone claiming that America’s economy is in decline is peddling fiction.”
He has a point. In fact, it’s not a particularly difficult argument to make. Despite a historically slow recovery, America continues to grow much faster than its advanced economy competitors. (Great Stagnation? Are you talking about China?) No large economy generates as many high-impact new companies as America, and no large economy is as competitive. The US remains the top destination for the world’s job seekers. Among most advanced economies, the working-age population will shrink over the coming decades. But America’s will grow. And given the difficulty of measuring the new digital economy with old wheat-and-steel economy metrics, Goldman Sachs warns that Americans should “be skeptical of confident pronouncements that the standard of living is growing much more slowly than in the past.”
Not that Team America doesn’t face challenges. Of course it does. It always does. Demographics will make fast growth harder than it has been in the past. Technology may be advancing faster and transforming labor markets more quickly than our education system is able to equip most children to fully exploit it. Our government doesn’t do particularly well in providing the key services we currently demand from it. It’s also made financial promises it’s unlikely to keep. Too many people still aren’t working or working for decent pay. Upward mobility may not be getting worse but it doesn’t seem to be getting better. Americans are worried, with two-thirds thinking the country is headed in the wrong direction.
So what to do? Modernize the safety net. Remove regulations that impede corporate competitiveness. Tax what we don’t want, not what we do. Judge government policy by its impact on innovation and dynamism. Disrupt failing institutions. Make America the most welcoming place on the planet for the risk takers, for the skilled, for those who want to, as South Carolina Governor Nikki Haley put it in her SOTU response, “work hard, abide by our laws, and love our traditions.”
We don’t need to make America great again. We need to make it even more awesome than it already is.