Courtesy Reuters

Debate: A Second American Century

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The American economy is in the eighth year of sustained growth that transcends the "German miracle" and the "Japanese miracle" of earlier decades. Everything that should be up is up -- GDP, capital spending, incomes, the stock market, employment, exports, consumer and business confidence. Everything that should be down is down -- unemployment, inflation, interest rates. The United States has been ranked number one among major industrial economies for three years in a row. America is riding a capital spending boom that is modernizing its existing industrial base and expanding its industrial capacity. The Dow Jones Industrial average is more than four times as high as it was six years ago. The New York and NASDAQ stock exchanges have added over $4 trillion in value in the last four years alone -- the largest single accumulation of wealth in the history of the United States. By contrast, Europe is stagnating and burdened with double-digit unemployment, and Asia is floundering in the wake of financial collapse.

This is no fluke. The unique American brand of entrepreneurial bottom-up capitalism is made up of structural elements that have wrought the stunning economic success of the 1990s and are likely to provide the basis for extending America's comparative advantage over time.

Consider where the country has come from and where it is undoubtedly going. America was all but written off in the 1980s because of its apparently uncontrollable fiscal deficit and its products' steady loss of competitiveness in the global economy. Downsizing and restructuring depressed everyone, but that valley is now largely traversed. In a literal application of Schumpeter's notion of creative destruction, the United States lost some 44 million jobs in the process of adjusting its economy but simultaneously created 73 million private-sector jobs -- a net gain of over 29 million

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