Dispatches from China

Investments in infrastructure will make U.S. more efficient

During a recent meeting I was asked by my Chinese hosts to give a brief synopsis of America’s direction during and after the financial crisis. I gave a brief speech, which has been shortened for this article.

The Federal Reserve has been putting out a Survey of Consumer Finances every three years since 1989. The last one should have been completed in 2007 but was not due to be released until early this year. Apart from some consternation as to why it’s taking so long, it is clear that when it comes out, it will reveal that America’s individuals, businesses and a nation took a 15- to 20-percent haircut over the last year.

Is it time to panic? Probably not. The U.S. is still the largest economy in the world. California, by itself, is the fifth-largest economy in the world and even the GDP of our smallest states dwarfs the output of most African nations. There is time, but the reverse economic spiral caused by lost wealth, jobs and confidence, left unchecked, could cause irreparable harm to us and the rest of the world.

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