Zakaria is always thoughtful and thought-provoking. Let him moderate a debate.
I wonder if we can rely on comparisons of infrastructure as a percentage of GDP – we spent huge amounts between 1950 and 1970, when China spent relatively little (I guess). Granted, 40 years later, we need some maintenance. [hat tip to Rebecca Lasley] mjh
What voters are really choosing in November « Fareed Zakaria
Below all the mudslinging lies a real divide. Obama has been making the case that the U.S.economy needs investment — in infrastructure, education, training, basic sciences and technologies of the future. Those investments, in the president’s telling, have been the key drivers of American growth and have enabled people to build businesses, create jobs and invent the future.
Romney argues that America needs tax and regulatory relief. The country is overburdened by government mandates, taxes and rules that make it difficult for businesses to function, grow and prosper, he says. He wants to cut taxes for all, reduce regulations and streamline government. All this, in his telling, will unleash America’s entrepreneurial energy.
Both views have merit. It would make for a great campaign if our nation had a sustained discussion around these ideas. Then the election would produce a mandate to move in one of these directions.
In both cases, the candidates would have to explain how they would square their ambitions with long-term deficit reduction. If Obama plans to invest government funds in infrastructure, or if Romney intends to cut taxes, each needs a serious strategy of fiscal reform. Obama has been more specific than Romney, but neither has been entirely honest about what the numbers show are necessary to get America’s fiscal house in order: cuts to entitlement programs and higher taxes (whether through higher rates or the elimination of deductions such as the one for mortgage interest).
On the broader economic strategy, I think that Obama has the stronger case. …
The result is that we’re falling behind fast. In 2001, the World Economic Forum ranked U.S.infrastructure second in the world. In its latest report we were 24th. The United States spends only 2.4 percent of GDP on infrastructure, the Congressional Budget Office noted in 2010. Europe spends 5 percent; China, 9 percent. In the 1970s, America led the world in the number of college graduates; as of 2009, we were 14th among the countries tracked by the Organization for Economic Cooperation and Development. Annual growth for research and development spending — private and public — was 5.8 percent between 1996 and 2007; inSouth Korea it was 9.6 percent; in Singapore, 14.5 percent; in China, 21.9 percent.
In other words, the great shift in the U.S. economy over the past 30 years has not been an increase in taxes and regulations but, rather, a decline in investment in human and physical capital.
What voters are really choosing in November « Fareed Zakaria