Sachs book
Jeffrey D. Sachs, author of more than a dozen best-sellers whose monthly columns are syndicated in more than 100 countries, has been called “probably the most important economist in the world” by the New York Times.
Time Magazine twice recognized him among the 100 most influential world leaders. The Economist magazine proclaimed him among the three most influential living economists of the past decade.
At a time when America seems more divided than ever as to how to best move its economic future forward, it makes sense to consult with the best possible experts.
Sachs certainly qualifies. His newest book, published last month, “Building the New American Economy: Smart, Fair and Sustainable,” is an insightful and illuminating roadmap to a potentially new economic journey.
It starts, Sachs suggests, by asking why we need to build a new American economy. The answers are stark. The U.S. is experiencing the lowest economic growth rates in the postwar era. Since the 2008 financial crisis, growth has been half of what was forecast. According to a McKinsey study, 81 percent of American households had flat or falling incomes from 2005 to 2014. Income inequity has given 22 percent of household income to the top 1 percent of the population.
Fear of jobs lost to automation, a soaring federal budget deficit and environmental sustainability are equally difficult economic challenges.
Sachs acknowledges that the pessimists of the current situation have a point. He, however, argues that overall they are mistaken. Instead, if “we get our act together,” we can solve the complicated and very real problems facing us.
He begins by identifying the problems the U.S. needs to address. The list seems long: soaring health care costs; high levels of private and public debt; the inability to raise taxes to pay for public programs; workforce changes due to globalization and automation; environmental concerns; the influence of money in politics; lack of trust in government; and a general unwillingness to address long-term planning.
While such a list may seem overwhelming, Sachs offers practical strategies to move America forward. He suggests a new possibility: sustainable development, a holistic approach that emphasizes three issues. Included are promoting economic growth and decent jobs; emphasizing social fairness; and working toward environmental sustainability.
The U.S. has focused too heavily on economic growth while the other necessary factors have been largely neglected. In losing its balance on these two, economic growth is in danger, Sachs warns.
In exploring how sustainable development can be achieved the book examines issues that were explored in last year’s political campaigns but remain unaddressed. Sachs goes into depth on many of the issues that face America today. Cutting “outlandish” health care costs, moving toward renewable energy, reducing the national debt, building infrastructure, establishing income equality, and other major issues are part of Sachs’ manifesto on how to deliver sustainable development for America.
In addressing long-term growth for the U.S., the author discusses why the U.S. has been experiencing slowing growth for decades. Discarding the pessimism of many “secular stagnationists” who state this is inevitable, he argues “the United States, and the world, can achieve rapid economic progress in the coming decades, but only if we address the root causes of slower growth.”
The current lack of economic growth has been created because the U.S. has stopped investing adequately in the future. Looking at saving rates of the private economy (business and households) and the government, Sachs found that saving rates for the private economy had declined by 5 percentage points of national income while government has gone to a chronic negative saving rate.
Higher saving and investment rates would change this. The benefits — particularly for new scientific and technological advances — are within grasp, Sachs says.
Renewing infrastructure must be done in sync with the country’s new needs, the author argues. This includes climate safety and a plan for new technologies and smart machines. We cannot simply patch the existing system; we need an overhaul.
Sachs proposes the opposite approach of a “short-term stimulus,” suggested by some politicians. Instead, he calls for “long-term thinking.”
“Rather than trying to deploy construction workers within the next 60 days,” he says, “I propose that we envision the kind of built environment we want for the next 60 years.”
“The New American Economy” challenges us to understand and accept that our economic future is a choice. “Economies don’t just grow, achieve fairness and protect the environment of their accord, “ Sachs writes. Such an economy requires investment of all kinds.
If we succeed in creating an economy built on sustainable development plan that is smart, fair and sustainable, Sachs says, “we hit the trifecta.”