Big Ideas from New America: An Economic Recovery Program for the Post-Bubble Economy
Source: Bernard L. Schwartz, Sherle R. Schwenninger, New America Foundation, July 2008
From the press release:
America’s economy is in serious trouble, and it will take more than the standard countercyclical measures to fix it. The nation today is mired in a post-bubble economy, and needs a bold and optimistic economic recovery plan that goes beyond conventional thinking. This new proposal from the New America Foundation offers exactly that.
In “An Economic Recovery Program for the Post-Bubble Economy” — the first proposal in New America’s new Big Ideas series — Bernard L. Schwartz and Sherle R. Schwenninger warn of the dangers of misreading the current slowdown, and map out a plan for harnessing the U.S. economy to the two most important new growth drivers: public infrastructure investment and rising global demand for efficiency-enhancing technology.
Mr. Schwenninger, directs New America’s Economic Growth Program. Mr. Schwartz, a member of the New America board of directors, is the former chairman and CEO of Loral Space & Communications, Ltd.
The full text of their proposal — along with supporting data and and video overview — can be found here. Highlights from their proposal, as articulated by Mr. Schwenninger in the video, include:
■ “The most promising two new areas of economic growth are America’s enormous public investment infrastructure needs, and the increased global demand for American technology, created by the drive for greater efficiency by economies around the globe.”
■ “Infrastructure investment is the single best way to stimulate the economy in the short term, and to make it more productive, more efficient in the long term. Infrastructure investment not only creates jobs but also provides additional demand for materials and services throughout the economy.”
■ “To ensure continued funding of public infrastructure investment over the next decade, we recommend that the new administration move quickly to adopt a national infrastructure bank, as proposed by Senators Christopher Dodd and Chuck Hagel.”
■ “Finally, given the magnitude of the housing and credit bubble, a massive public infrastructure investment alone may not be enough to offset consumer weakness and jumpstart new business investment. Rising exports of American goods and services. . . therefore must be a second pillar of an economic growth recovery program.”
■ “There are both political and economic reasons for large surplus economies to shift their economic policy toward more balanced economic growth in the near term. The next administration needs to do a better job of sending the message to large current-account-surplus economies, including the advanced economies of Japan and Germany, that they need to do more to generate their own demand.”