How the United States Can Maintain Its Global Edge – The Atlantic

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Over the next four years, U.S. President Barack Obama has an
opportunity to help the U.S. remain competitive in a rapidly globalizing,
recalibrating world. While emerging markets have been grabbing larger
slices of the world’s economic pie, America has slid to seventh in the Global Competitiveness Report
(pdf). So while looming problems like runaway health costs and a broken
tax system certainly demand attention, we also need a few targeted
policy changes to help us maintain our global edge. Importantly, the US
has run out of time for partisan squabbling. Dozens of countries are on
the move, gaining economic strength at the expense of all the United States of America, both red and blue. Five ideas to improve our competitiveness:

1. Avoiding the fiscal cliff:  Priority
No. 1: Break the political gridlock with a debt reduction plan a la
Simpson-Bowles. This would go miles toward restoring foreign and
investor confidence. Without it, the U.S. dollar’s stature as a reserve
currency may come into question, causing disastrous fallout on the world
markets. If automatic spending cuts are triggered in January — after last
summer’s embarrassing near default — Congress should seriously consider
resigning. Declining faith in government was a major reason for the U.S.  fall in the competitiveness report.

2. Strengthen government statistics: In
a complex, globalizing world, the US suffers from often flawed and
dated data. Without reliable data, it’s impossible to craft sound
policies. The most influential statistics, including GDP and
unemployment, are largely compiled by the Census Bureau, Bureau of
Economic Analysis, and Bureau of Labor Statistics — funded by a paltry
$1.6 billion of Washington’s $3.7 trillion budget to study our nearly
$15 trillion economy. In a report for the Center for American Progress, Andrew Reamer recommends a modest bump of $300 million to help bring us into the true Information Age.

3. New infrastructure and energy production: We can’t compete using crumbling bridges, roads, and ports. American
infrastructure is ranked 25th globally, according to the Global
Competitiveness Report. Equally important is expanding our domestic
energy production capabilities — from fracking to renewables — which would
reduce imports, lower electricity costs, reshore lost manufacturing, and
boost employment. Combined, these could be game-changers and reverse
America’s 30-year decline in trade. Michael Lind and Sherle Schwenninger
of the New America Foundation have called for a federal Works Progress
Administration-style infrastructure bank to help finance more than $2
trillion over five years. With interest rates low, and returns on
infrastructure high, there may never be a better time.

4. Graduate student visas:
With unemployment near 8 percent, many would be surprised that America runs
labor shortages in several critical areas including in science,
technology, engineering and math, or STEM. We haven’t expanded our
immigration system in more than a decade while the world has changed
dramatically. This matters because highly educated immigrants boost
American innovation: they represent 24 percent of all U.S. scientists and a remarkable 47 percent of U.S. engineers with advanced degrees.
Between 1998 and 2006, U.S. patent applications from foreign-born
nationals grew from 7.3 percent to 24.2 percent.  With some 700,000 foreign students
currently earning degrees at U.S. universities, why not offer green cards
to an extra 50,000 graduates in STEM sectors? Exporting this kind talent
after graduation only hurts our global competitiveness.

5. “Smart” power and defense cuts: The
U.S. spends more on defense than the next 10 countries combined, now more
than $750 billion per annum including debt on previous Defense
Department binges. That is a competitive disadvantage, economically speaking. The State Department, alternatively, uses only $50 billion. More “smart power” —
increased diplomacy, multilateral efforts, and cheaper hardware like
drones — can help keep the country safe while using resources far more
wisely.