The Battle to Restore American Competitiveness

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The Battle to Restore American Competitiveness

The United States has slipped from number one to number seven in the World Economic Forum's competitiveness ranking over just the last four years.1 This decline has been driven by:

  • Rising debt
  • An aging population that is beginning to put a strain on social services
  • Schools that have slipped by international standards
  • Crumbling infrastructure

The Global Competitiveness Report

In addition, we've burdened our businesses with costly regulations, a tax code that penalizes innovation and success, and a harebrained immigration system.

A few countries (notably China) applaud the relative decline in America's competitiveness because they see their relative rise as a vindication of their success. However, most countries see the decline with rising concern, knowing their futures are directly tied to America's success.

This declining competitiveness is reflected in Americans' current expectations for our economic future. They are more pessimistic now than at any time since 1959, when Gallup first began polling on this question. It's easy to understand these feelings in the face of sluggish growth, high unemployment, and wary investors.2

For many corporations, it's the high cost of regulations and taxes that are holding them back from expanding, as evidenced by the nearly $2 trillion in cash they are holding. There is also a fear of the unknown coming out of Washington.

Despite these obvious problems, there are small things happening at the regional and local levels that indicate the economic outlook is not as bleak as things appear. The housing markets are beginning to see improvement, the stock market continues its climb, and consumer balance sheets have improved.

Furthermore, businesses and local politicians are tackling issues that impact competitiveness that Washington has been ignoring. They are no longer waiting for the federal government to provide solutions, which is how America works best.

A closer look reveals improvements in several areas, including business incentives, education, infrastructure, energy, innovation, and immigration.

Local officials are catching on to the factors that either attract or scare off businesses, realizing the jobs they bring, along with investment, are the life blood of any community. As a result, communities are beginning to raise the level of jurisdictional competition for businesses, reducing or eliminating elements that represent disincentives to profitable growth...

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