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By Root 532 0

Or the economy could deteriorate to the point of creating a downward spiral of rising budget deficits, a deepening political crisis, and yet further deficits. That’s the path that leads to hyperinflations and defaults on government debt. Such disasters are more frequent than we in the United States tend to realize. Thank goodness, we’ve never experienced such an upheaval, at least since the Revolutionary War and Civil War. I’ve helped to clean up hyperinflation in many other countries, however. Fortunately we’re not close to that now, but another five to ten years of drift could certainly bring us closer to the fiscal cliff. One recalls the dark joke in the waning days of the Soviet collapse: “Comrades, we were at the edge of the cliff, and we’ve just taken a giant step forward!” A few more tax cuts for the rich, and we’ll be in a position to say the same.

Real change will not come easily because there is so little consensus on the way forward. America may well continue to choose very badly, for example by cutting taxes further despite the gaping deficits or continuing to reject decisive action on climate change because of the poor economic conditions. Politics, alas, is filled with “positive feedbacks,” meaning in essence that one damn thing leads to another, with each disaster causing the next. In recent years, the outsourcing of government services to incompetent and corrupt contractors has led to repeated failures, leading to more criticism of government and then, ironically, to still more outsourcing! The collapse of government becomes, in essence, a self-fulfilling prophecy.

All this means that it’s extremely difficult to get on the right track. Yet it’s certainly possible. The actual solutions are within reach and require only moderate changes of course. And the pace of change accelerates these days because the spread of ideas is so much faster than in the past. What seems outlandish and impossible one moment becomes mainstream and inevitable the next.

Eyes on the Prize

When short-term navigating is so difficult, the key is to keep one’s eyes on the long-term prize. We spend an inordinate amount of time worrying about the latest wiggle in consumer confidence, industrial production, or new orders. Great fortunes are made and lost depending on who can guess better, even when little can really be done about the economy’s short-term meanderings. A far better use of our time would be to maintain long-term focus on the issues that will have mattered decisively when we look back after a quarter century. I believe that four issues will prove to be decisive for America and its place in the world: education, environment, geopolitics, and diversity.

The first decisive issue will be education. The path to national prosperity, life satisfaction, and sustainability in the twenty-first century will depend heavily on education, and especially on a large proportion of today’s young Americans being able to complete higher education, albeit a higher education that has been fashioned to fit the needs of our times. The labor-market data tell the brutal truth: low-skilled workers are either scraping by in near poverty or failing to find work altogether. There is almost no chance today of securing a well-remunerated career without a college degree or its equivalent in vocational training. Low-skilled jobs are being filled by recent immigrants prepared to accept wages a cut above those of their home countries, replaced by outsourcing, or eliminated by reengineering the jobs away entirely using advanced information technology. Young people know these facts and are prepared to go deeply into debt to achieve a higher degree. Yet steeply rising tuition and onerous borrowing terms have led to epidemics of dropouts or limited enrollment in the first place.

One of the bright spots in education is the potential, still in its early days, for information technology to transform the educational process, making it more effective and accessible to all. More and more curricula can be found online; more and more distance learning can link disparate