The Heritage Foundation - Derek Scissors, Ph.D. and J.D. Foster, Ph.D.: Avoiding America’s Lost Decades

Avoiding America’s Lost Decades

By Derek Scissors, Ph.D. and J.D. Foster, Ph.D.

http://www.heritage.org/Research/Reports/2011/10/Avoiding-Americas-Lost-Decades

October 18, 2011

Print PDF Download PDF SHARE Facebook Twitter Email More

The warning bells were sounded in early 2009: The U.S. government had to act swiftly and forcefully to avoid repeating Japan’s painful experience of sustained economic stagnation.[1]The Obama Administration’s policies have failed to this point, and Japanese-style long-term stagnation may well ensue unless a fundamental course correction and decisive steps are taken. The two most important steps are to halt the federal government’s regulatory onslaught and to put the federal budget on a credible path toward balance by cutting spending quickly and steadily.

Japan’s Fall

It is hard to exaggerate the shift in Japan’s fortunes over the past two decades. The Japanese economic miracle lasted over 40 years and saw the country climb out of true devastation from World War II to have the globe’s second-largest economy, as measured by gross domestic product (GDP). Many observers thought it was only a matter of time before Japan replaced the United States as the world’s leading economy.

How times have changed. The conventional wisdom now is that Japan suffered a “lost decade.” Actually, it has been almost two decades, and there is no end in sight to the stagnation. In 2010, the Japanese economy looks to have been smaller than it was in 1992, an incredibly poor result. It is not just a matter of a decline in output; it is also a remarkable decline in total wealth. In 1991, excluding micro-states like Luxembourg, Japan was the fourth-richest country in the world as measured by GDP per capita. In 2010, it was no longer in the top 20, was below the OECD average, and would have likely fell further but for Europe’s own economic troubles.[2] … http://www.heritage.org/Research/Reports/2011/10/Avoiding-Americas-Lost-Decades

*****

Kevin Dayhoff Soundtrack: http://kevindayhoff.blogspot.com/ = http://www.kevindayhoff.net/ Kevin Dayhoff Art: http://kevindayhoffart.blogspot.com/ or http://kevindayhoffart.com/ = http://www.kevindayhoff.com/ Kevin Dayhoff Westminster: http://kevindayhoffwestgov-net.blogspot.com/ or http://www.westgov.net/ = www.kevindayhoff.org Twitter: https://twitter.com/kevindayhoff Twitpic: http://twitpic.com/photos/kevindayhoff Kevin Dayhoff's The New Bedford Herald: http://kbetrue.livejournal.com/ = www.newbedfordherald.net Explore Carroll: www.explorecarroll.com The Tentacle: www.thetentacle.com