The U.S. can still do big things and thus address the many challenges that the economy faces—challenges that the private sector likely won’t address on its own. A recent survey of the available economic evidence co-authored by me indicates that the government can incur debt to lay the foundation for widely shared prosperity, yet America cannot afford wasteful trillion dollar giveaways to the wealthy. Smart public investments in infrastructure, education and social insurance will accelerate economic growth, create more well-paying jobs, lower income inequality and give more people a shot at a decent retirement—all within the borrowing capacity of the U.S.
The country faces a number of overlapping challenges. Long-term productivity and economic growth are far too modest, yet income and wealth inequality are high. In addition, climate change poses enormous risks for American workers, farmers, businesses and consumers from the coasts to the heartland. Affordable housing eludes too many workers. And an aging population puts pressures on the country’s health care and retirement systems.This article was originally published in Forbes.