According to the institute’s report, “government effectiveness” is measured by quality of public services, civil service, policy formulation and implementation, and the credibility of the government’s commitment to policies. The US falls short on all counts.
For example, the American Society of Civil Engineers estimates that more than $2 trillion is needed to fix US bridges, dams, waterways, and wastewater plants. Meanwhile, just 9 percent of Americans approve of how Congress is handling its job – an all-time low. US tax, trade, and labor policy over the last 30 years has largely failed the American people. You see that in the Occupy protests.
The tide is changing however. “Make it in America” is now bipartisan and bicameral and could do wonders for cities once buzzing with manufacturing and industry. The concept of a National Infrastructure Bank for public-private projects is becoming increasingly popular in Washington.
Distribution of resources
There is a “growing unequal” in America, to borrow a phrase from the Organization for Economic Cooperation and Development (OECD). Americans now have the highest poverty rate since WWII and the highest income inequality rate since the Great Depression. Data compiled recently by the Economic Policy Institute show that in the last 30 years, the top 1 percent doubled their incomes. Everybody else gained hardly anything.
It behooves the US to close its inequality gap because with it comes a host of social-health problems, whether those are high rates of homicide, incarceration, obesity, illness, addiction, teenage pregnancy, illiteracy and low social mobility and life expectancy – which cost in the hundreds of billions of dollars.
Improving this situation requires making it easier for Americans to get ahead, get insured, get educated, and get a job. The current tax code benefits asset owners (e.g. low taxes for capital gains) much more than it benefits wage earners. A more fair and distributive tax system would help balance the inequitable scales.
High levels of education
Considering persistently poor scores on the Program for International Student Assessment, which is given to 15-year-old students by the OECD, America’s mediocre ranking in science, math, and reading has US policymakers scrambling for a fix. A recent example is releasing states from No Child Left Behind (NCLB) standards, allowing them to pursue their own accountability and performance measures. (Half of public schools fail to meet NCLB standards, according to a December report by the Center on Education Policy.)
The US needs to go beyond the short-term fixes of voucher programs and charter schools, which may work well for some but neglects others and fails to fix a broken system. The Department of Education’s Equity and Excellence Commission, is a step in the right direction. It uniquely focuses on how education is financed to address disparities in educational opportunity.
Meanwhile, a college education is still inaccessible and unaffordable for many. Student debt nearing $1 trillion is testament to this unsustainable trend. The Bill & Melinda Gates Foundation’s focus on community colleges and efforts by governors to nationalize core curriculum standards are encouraging.
Greater educational opportunity and graduation rates correlate with lower levels of violence (see the US Peace Index) thus requiring fewer state funds to respond to violence. But with presidential candidates queuing to further cut the federal role in education and with congressional deficit reduction agendas targeting education funding, vigilance is vital – America’s economic future depends on it.
Five other ingredients
America does fairly well on five other factors in the institute’s report: a sound business environment, acceptance of the rights of others, good relations with neighbors, free flow of information, and low levels of corruption. But there’s still much room for improvement.
For example, on the “rights of others,” the US has yet to ratify the international treaties related to the rights of the child, the International Criminal Court, and the elimination of discrimination against women.
On “corruption” and the perception of corruption, the Occupy Wall Street protests illustrate growing distrust of the financial industry, an industry that can now spend unlimited amounts in federal elections thanks to campaign finance laws weakened by the Supreme Court.
On “good relations with neighbors,” America’s ongoing drug and gun wars with Latin America and war and conflict in Afghanistan, Pakistan, Yemen, Somalia, and Libya, continue to cost taxpayers trillions of dollars.
Baby steps on any of these fronts will garner big gains as a more peaceful America (on par with Canada, for example) would yield $361 billion in annual savings and additional economic activity. The investment is worth it.