Michigan's Economic Future: A New Look

7. What Will Michigan’s Economy Be Like in 2030?

2 225 2 What Will Michigan’s Economy Be Like in 2030? O n December 1, 1862, in the midst of the greatest crisis in American history, Abraham Lincoln sent his second annual message to Congress . He wrote, “The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew, and act anew. We must disenthrall ourselves, and then we shall save our country.” The difficulties facing the people of Michigan today are not nearly as profound as the difficulties faced by Lincoln and his fellow citizens during the Civil War. Nevertheless, Michigan is at a critical moment in its history. We too face an occasion that is piled high with difficulty, and we too must rise to the occasion . We in Michigan in 2010 would do well to heed Lincoln’s words: yesterday’s dogmas are inadequate for today. If Michigan’s economy is to reverse the long, slow slide of the last several decades, we will need new attitudes and new policies. In this book, I have discussed attitudes and policies that will lead toward a brighter future for Michigan, in terms of the economy and in other ways. In this final chapter, I ask what Michigan will be like in the year 2030 (rather than 2011, 2012, or 2013). Although we cannot ignore what happens in the next few years, I frame this question in terms of a twenty-year time line 7 226 2 MICHIGAN'S ECONOMIC FUTURE because Michigan faces long-term economic problems. These problems will not be fixed in the next year or two, or even in the next four years. However, if the people of Michigan have the wisdom and courage to do something about it, we can make some major improvements over the longer term. Much of this chapter is devoted to a summary and synthesis of the policy analyses from earlier chapters. However, before I get to that summary and synthesis, I want to say more about the values that have formed the basis of the policy recommendations in this book. People with different values can look at the same set of facts and reach different policy conclusions. Thus the policy recommendations discussed here are not merely the result of my economic analysis; they are also the result of my values. Values Regarding Future Generations of Michigan Residents As I see it, the people of today have a moral obligation to pave the way to a decent future for the people of tomorrow. Unfortunately, many of the decisions being made today in Michigan and across the country are doing a disservice to the people of future generations. For example, the private savings rate in the United States has been declining for decades. And except for the brief period from 1997 to 2000, the federal government has run large budget deficits for the past forty years. Consequently, Americans have now borrowed trillions of dollars from other countries. Americans are spending like there’s no tomorrow, rather than saving and investing to prepare for the future. Here in Michigan, we are cutting our investments in education. At this crucial moment, we in Michigan are eating our seed corn, with little regard for future generations. I believe these trends are taking us in the wrong direction. The problem with behaving like there’s no tomorrow is that tomorrow will inevitably come, regardless of whether we prepare for it. To use the jargon of economists , I believe that we should not “discount” the future very greatly. Those who discount the future very heavily may look at today’s situation and say that everything is fine. Many of my recommendations will not make much sense to those who place far more weight on today than tomorrow. Maybe I’m wrong. Maybe we should consume as much as we want to consume now and leave future generations to fend for themselves. But I don’t think so. WHAT WILL MICHIGAN’S ECONOMY BE LIKE IN 2030? 2 227 Values Regarding Middle-Income and Low-Income Michigan Residents The second set of values that must be mentioned are those concerning the distribution of income. I am troubled by the increasing inequality of income and wealth in Michigan and throughout the United States. Those with the most...