The United States, and our Western capitalist partners, have entered a new economic era. Intense global competition has suppressed wages in some industries that had uncompetitive cost structures. And because political leaders of both major parties have for far too long emphasized consumption and income protection at the expense of investments in the future, the adjustments necessary to provide new opportunities to replace lost employment have been slow and inadequate.
Meanwhile, as economic pressures have intensified, it’s become clear that the social welfare arrangements built decades ago by governments and employers are no longer viable, especially in view of the unprecedented demographic transformation — rapid population aging and slow or stagnant labor force growth — now underway in the industrialized world.
There’s no retreating from these challenges, especially global competition. What policy makers must do is get the policy fundamentals right again so that dynamic economic growth in the private sector can once again generate new opportunities for the middle class….
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