Much has been written about the decline of the U.S. as a world leader since the financial crisis. But despite relatively high unemployment and a widening income gap between the rich and everyone else, growth is accelerating, debt is declining and the banking sector is relatively healthy.
Economist Joel Kurtzman, who is also a senior fellow at the Milken Institute, says America is not in decline and actually on the verge of resurgence.
The author of the new book Unleashing the Second American Century: Four Forces for Economic Dominance, Kurtzman cites "four transformational forces" that will lead that to resurgence: tremendous creativity--"we produce more new ideas ... than any other country" -- tremendous energy reserves, reserves of capital and a re-shoring of manufacturing.
He visited The Daily Ticker to dispel five major myths about America, as you will see in the video above.
Myth #1: America is broke
America's private sector is in better shape than it's been in years, and the American consumer is healthier than she or he has been in the past 35 years, says Kurtzman. "On the private side of the balance sheet America is doing just fine," says Kurtzman. The public side is another story, but it's improving. The money America uses to pay its debt has been declining as a portion of GDP every year, "and it's very manageable," says Kurtzman.
Myth #2: High unemployment rates are here to stay
Kurtzman says the high jobless rate is concentrated in people without a college education and those under 25. The unemployment rate for someone over 25 who's college educated has held steady at around 4%.
Related: U.S. Economy Will Trump China's in 2014
Myth #3: China is ascending while America is declining
"China is coming of age at probably the worst time in history for a country that wants to be a manufacturing power," says Kurtzman. China's strategy involves having 200 million people a decade working in manufacturing, says Kurtzman. "They can't accommodate that," says Kurtzman. The U.S., meanwhile, has moved from a manufacturing-centric economy to a service-focused one--a transition that China will eventually have to make, says Kurtzman. "That will be very difficult for them."
Myth #4: America is a spent power
Kurtzman says the U.S. is in a great position for growth because it remains the world's leading military and manufacturing power, has trillions of dollars in capital to deploy and is now less dependent on imported oil given the development of its own energy reserves.
Myth #5: America doesn't make anything anymore
This is simply not true, says Kurtzman. America is the dominant manufacturing power in the world if you include what we make overseas. But if you just look at just what we make in America, we make 20% of everything produced. That's about the same as China but China makes low value-added products such as towels and clothing. We make airplanes, radar, turbines -- the big expensive stuff.
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