A bleak look at America’s future

Burrows and other contributors met in Washington this month to hear outside comments — and it was an eye-opening discussion. A somewhat pessimistic paper on the U.S. economic outlook, prepared by Uri Dadush of the Carnegie Endowment for International Peace, was criticized at this meeting for not being pessimistic enough.

The base-line scenario offered by Dadush was that America would avoid economic icebergs and stabilize its deficit and debt problems. The U.S. economy would grow an average of 2.7 percent annually between 2010 and 2030, and the country’s share of Group of 20 gross domestic product would decline from about a third to about a quarter.

Dadush offered a second, bleaker picture, where breakup of the euro zone triggers a huge financial crisis that spreads to the United States. After several years of deep recession, the United States begins to expand but anemically. Under this forecast, U.S. growth would average just 1.5 percent through 2030. “Seen as a country on the down slide, the United States is both incapable of leading and disinclined to lead,” wrote Dadush about the more negative version.

A disturbing consensus emerged among the analysts that something closer to the pessimistic scenario should be the base line. Fred Kempe, president of the Atlantic Council, the think tank that hosted the meeting, sums up the views of these analysts and of a similar exercise last month by the World Economic Forum when he warns that the biggest national-security threat is “the danger of receding American influence on the world stage.”

My own view (I was asked to critique the presentations as an independent journalist) is that the key issue is how the United States adapts to adversity. That offers a slightly more encouraging picture: Relative to competitors, America still has a more adaptive financial system, stronger global corporations, a culture that can tap the talents of a diverse population and an unmatched military. The nation’s chronic weakness is its political system, which is approaching dysfunction. If the United States can elect better political leadership, it should be able to manage problems better than most competitors