June 02, 2010
Taking on the Three Deficits Report a "Must Read"
In case you missed it, the Council on Foreign Relations just listed the Breakthrough Institute report, "Taking on the Three Deficits: An Investment Guide for American Renewal," as a "must read" report in their round up of "the best online analyses and inquiries on foreign policy."
Written with the Information Technology and Innovation Foundation, the report shows that the United States faces not one but three interrelated deficits challenges. As the report notes:
"An oftentimes myopic focus on the budget deficit has obscured the fact that America actually faces three deficits--the budget deficit, the trade deficit, and the investment deficit--that, if left unchecked, could total over $41 trillion in the next 10 years. Reducing all three deficits, not just the budget deficit, is critical to future economic prosperity."
The only way to reduce the three deficits, we argue, is to increase productive public investments in innovation, productivity, and competitiveness, while making targeted cuts to areas of consumptive government spending.
More economic experts are embracing the idea that the only way to both climb out of our economic doldrums and close the budget deficit, is through growth-enhancing public investments.
In last week's Washington Post, Fareed Zakaria argues that federal investment is central to long-term economic growth. Yet over the last two decades America has failed to make long-term investments to sustain economic prosperity. In "Taking on the Three Deficits," we estimate that America's "investment deficit" now totals $2.5 trillion and may grow to $5 trillion by 2020. "If we want the next generation of growth," Zakaria writes, "we need a similarly serious strategy of investment."
You can read the full "Taking on the Three Deficits" report here.