Since the good news period, in which almost everything went right in the American economy, ended in the early 1970s, much of the economic news has been disappointing. This chapter addresses two questions: Why did the good news peter out, and what can be done to brighten the economic future? Answering these questions involves delving into four economic mysteries: Why did productivity growth slow down, why did income inequality increase, why did national saving drop, and why did medical costs rise so rapidly? None of these questions has clear, unambiguous answers--they are genuine mysteries--but each yields clues to better performance in the future.
It is hard to overestimate the importance of productivity growth to the economic future of Americans. Unless the population is spending more time working, the level of living can rise