Economics, Pethokoukis

8 ways to make the US economy more productive and competitive

010513mckinsey

How can we get the American economy moving forward again? Consultancy McKinsey Global Institute offers a few general ideas (in the above chart) that should help focus attention in Washington. Indeed, bad government is a common theme as to why the US economy is not as productive or competitive as it could and should be. In some areas it should do more, others less.

And some final conclusions:

10 thoughts on “8 ways to make the US economy more productive and competitive

  1. Education improvements take years to add any value and dumping money into the current system will do nothing.

    “Next-generation infrastructure” sounds like Green wet dreams. How does, say, High Speed Rail, improve productivity? Is adding a lane to a highway “Next-generation”?

    Public sector “productivity” could mean more faster EPA, OSHA, SEC, IRS forms. And what public sector unions are going to allow automation? How about eliminating regulations?

    As to the others, private investors are doing all the heavy lifting. Best government can do is get out of the way.

  2. Starting a new business is taking a risk. To encourage business creation, remove burdens and impediments to entrepreneurship while leaving in place social safety net to catch the inevitable casualties.

    • Starting a new business is taking a risk. To encourage business creation, remove burdens and impediments to entrepreneurship while leaving in place social safety net to catch the inevitable casualties.

      First, government run safety nets have to be funded out of taxes extracted from businessmen and workers. If you are a principle based type you would argue that the government should not steal the earnings of individuals to finance its projects. If you are the utilitarian type you can argue that privately run safety nets would do much better.

      Second, if you want capital formation the best way is to get the government out of the way by cutting the regulations that stand in the way of business creation. Government needs to just get out of the way, not do anything more.

  3. Can I axe you a question?

    Medicare, Medicaid, and Social Security—along with other entitlements such as food stamps, unemployment, and housing assistance—make up 62 percent of all federal spending. Don’t you think that its time that we take the axe to this before this takes the axe to America?

    • But….but…..how will the politicians buy votes if they cut spending?

      Will Not Happen, so long as there’s one dime left that they can loot from We The People.

  4. How about actually formulating and enforcing stricter anti-immigration policies? Immigrants are NOT aiding in creating jobs.

    Immigrants are not ‘transferring wealth’ from their home country to the US (adding to the tangible wealth of the host nation). They source their $$$ money from the host nation itself. They add human effort, granted, but this effort is not something that is ‘irreplaceable’ by others working the same till. example: If you get 100 dollars from me, keep 50 dollars, and hand me 50 dollars back, does that mean you transfered ‘net’ 50 dollars from your hand to mine? The 100 dollars was mine to begin with…

    • Immigrants are not ‘transferring wealth’ from their home country to the US (adding to the tangible wealth of the host nation). They source their $$$ money from the host nation itself. They add human effort, granted, but this effort is not something that is ‘irreplaceable’ by others working the same till. example: If you get 100 dollars from me, keep 50 dollars, and hand me 50 dollars back, does that mean you transfered ‘net’ 50 dollars from your hand to mine? The 100 dollars was mine to begin with…

      You are confusing wealth with money. Immigrants help to capital formation in the United States. That capital formation creates wealth and the country is better off. Money is simply a medium of exchange. Immigrants get money when they exchange their skills and efforts for pay but the fact that they do earn and use the earnings as they choose is not and has never been an issue. If they send the money back ‘home’ it will eventually be used by purchasing American goods or services, which will mean business for American producers.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>