The difficulty U.S. Congress has had agreeing on spending for this year and avoiding a government shutdown is an indication of just how hard it will be to deal with our longer term debt crisis. Our rising debt burden is a problem we must confront in order to preserve our nation’s ability to address the many challenges on the horizon and to invest in our nation’s productive capacity.
The nonpartisan Congressional Budget Office (CBO) estimated that there was a $1.7 trillion dollar gap between what the government spends and the revenue it takes in 2023, nearly double the annual budget deficit from last year. Absent significant policy changes, under even the most optimistic scenarios, the accumulated federal debt held by the public will rise above 100 percent of GDP by 2053, a level well above historical experience.
This fiscal imbalance reduces our capacity to spend on national priorities, in ways that will advance economic growth and shared prosperity. As laid out in our new Aspen Economic Strategy Group policy volume, such a high level of debt threatens the resiliency of the U.S. economy. It will push up interest payments and slow economic growth by crowding out private investment and public spending that could otherwise be used to improve America’s workforce, infrastructure, and productive capacity. As one stark illustration of this fact, the federal government is on pace to spend more paying down the interest on the debt than on all programs serving U.S. children, including early childhood education and public health insurance programs that have been shown to yield large social returns.
In addition, the rising debt makes it much more expensive to raise the funds that would stimulate the economy when the next recession inevitably arrives, or to allocate necessary spending in the face of unforeseen setbacks and geopolitical shocks.
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The arc of the Chinese economy over the next 10 to 15 years will depend on three sets of forces, each of which interacts with the others: (1) Domestically, the internal political economy will determine the relationship between the state and the market. (2) Externally, the relationship between China as a nation and the US-led West will determine China’s access to foreign technology, finances, and markets. (3) Traditional economic forces such as total factor productivity (TFP), population and human capital, and capital and investment will determine China’s growth potential. Even though most studies focus on this third set of traditional economic forces—the ones determining growth potential—the first two sets of forces will ultimately determine how close the Chinese economy can come to realizing that potential. This paper examines the range of outcomes for China’s economy through this lens: growth rates could reach 6 percent if China focuses on market-oriented reforms, or they could stagnate if, in response to external or internal pressures, leaders instead continue to turn to more centralized decision-making and to top-down planned resource allocation.
Suggested Citation: Fang, Hanming. November 8, 2023. “Where Is China’s Economy Headed?” In Building a More Resilient US Economy, edited by Melissa S. Kearney, Justin Schardin, and Luke Pardue. Washington, DC: Aspen Institute. https://doi.org/10.5281/zenodo.13886913.
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Executive Summary
Global supply chains—the network through which products and services move from initial producers to final consumers—have become increasingly complex over the past several decades. Recent disruptions caused by the COVID-19 pandemic, along with the threat of further interruptions from rising geopolitical risks, have exposed the fragility of today’s supply chains. To build more resilient networks, US policymakers have taken three main approaches: increasing domestic manufacturing capacity (“reshoring”), building new supply chains among foreign partners aligned with US interests (“friendshoring”), and reducing dependence on trade partners considered untrustworthy (“derisking”). This paper evaluates these strategies, weighing the likelihood that each will reduce the potential of future disruptions against the costs to taxpayers and consumers. Reshoring builds domestic capacity but is costly and only tenable in a few critical sectors. Friendshoring balances the efficiencies of trade while preventing reliance on rival states but can ultimately result in longer and less transparent networks. Finally, derisking our relationship with China will allow the US to diversify critical supply chains but is complicated by the country’s dominant role in world trade and by ongoing political tensions.
Suggested Citation: Lovely, Mary E. November 8, 2023. “Manufacturing Resilience: The US Drive to Reorder Global Supply Chains” In Building a More Resilient US Economy, edited by Melissa S. Kearney, Justin Schardin, and Luke Pardue. Washington, DC: Aspen Institute. https://doi.org/10.5281/zenodo.13974144.
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Executive Summary
The global COVID-19 pandemic created not only a once-a-century public health crisis but also a once-a-century public education crisis. Unfortunately, the United States federal government’s financial assistance to schools to overcome pandemic-induced learning loss is about to expire – despite the fact that the country has made almost no progress remediating this learning loss. In thinking about where to go next, we first look backward to examine why so little progress was made over the past few years. Changing student learning outcomes requires changing what schools do; that has been hard partly because of the chaos in the wake of the pandemic, but also because change is difficult for all organizations. We illustrate some of the challenges within the context of one specific type of instructional content for which US Secretary of Education Miguel Cardona encouraged schools to prioritize relief funding: high-dosage tutoring, a promising technology that’s been known for centuries to help students of all ages. To avoid lifelong negative consequences for a generation of 50 million school-age children, policymakers need to (1) extend the timeline over which federal assistance is available, (2) provide additional resources beyond that, and (3) nudge schools to take difficult steps that will ultimately help students through increased accountability or other means.
Suggested Citation: Guryan, Jonathan and Jens Ludwig. November 8, 2023. “Overcoming Pandemic-Induced Learning Loss.” In Building a More Resilient US Economy, edited by Melissa S. Kearney, Justin Schardin, and Luke Pardue. Washington, DC: Aspen Institute. https://doi.org/10.5281/zenodo.14019299.
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Executive Summary
Pharmaceutical pricing in the United States is a complicated and opaque process. Confusion over price setting and the method by which new drugs are brought to market can lead to ineffective and even harmful policies that decrease society’s access to innovative new treatments without providing sufficient decreases in spending to justify the cost. At its core, drug pricing in the United States involves a tradeoff: allowing high prices today provides firms with the incentive to make the large, fixed, and sunk investments necessary to bring future new products to market. In that way, high prices are a central part of the process by which we get new drugs. That being said, firms may—in some areas of the market—take advantage of the complexity of the system to extract profits at a rate that far exceeds any beneficial incentive effects. A wide variety of firms and individuals in the market exhibit such behavior. In this paper we both explain the underlying complexities of how prices are set and suggest areas where policy reforms could improve the market.
Suggested Citation: Garthwaite, Craig and Amanda Starc. November 8, 2023. “Why Drug Pricing Reform Is Complicated: A Primer and Policy Guide to Pharmaceutical Prices in the US” In Building a More Resilient US Economy, edited by Melissa S. Kearney, Justin Schardin, and Luke Pardue. Washington, DC: Aspen Institute. https://doi.org/10.5281/zenodo.14019679.
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Executive Summary
