Bloomberg View feels that the keys to maintaining this advantage will be more spending on research and technology by the government and corporations, rejuvenating our educational system, and expanding immigration policies for both skilled and unskilled workers.
Indeed, the report presciently holds that global worker mobility will be a huge driver of economic growth, eluding countries with closed-door policies and repressive governments. Countries with freer trade will also come out better, another reason for the U.S. to push forward on the Trans-Pacific Partnership and other trade deals.
Less presciently, the report anticipates a drop in U.S. military spending — from 4.8 percent of gross domestic product to potentially as little as 1.6 percent to 2.6 percent. This seems unlikely, given the need to counter Chinese military and political sway in Asia and to confront a growing number of small-state and nonstate threats.
Nonetheless, the authors are correct that the U.S. will be less able to afford unilateral military and security action and will be more dependent on international alliances and forging stronger relationships with India and other rising states. Also vital are keeping the dollar in place as the world's reserve currency and maintaining the role of first responder and balanced arbiter in international crises.
The one thing the world cannot afford, the authors insist, is a U.S. withdrawal from global leadership or its economic collapse. No matter the results of the "fiscal cliff" negotiations, much rides on the U.S. getting its finances into a sustainable position. Increasingly for the U.S., leading the world will require taking care of business at home.