It pained me to read in today’s New York Times Sunday Business section a stinging critique of America’s retirement system. A Dutch pension specialist is quoted: “The rest of the world sort of laughs at the United States – how can a great country get so many things wrong?”
Retirement security is of course a big issue for boomers and their children. The fortunate upper echelon has plenty of income and assets. As a country, however, our household savings rate is stuck below two percent, one-fifth of the rate in Germany and one-fourth that in Poland. These days half the country struggles with low and stagnant earnings: when corrected for inflation, the median household income still has not recovered to the 2007 level. Half the country’s households have a net worth of $81,000 or less, an amazingly modest level down 40 percent from the 2007 peak. No savings, falling incomes and declining net worth are a recipe for social and economic disaster, yet no coherent national response has been forthcoming from elected officials.
My distress is all the greater because the same scornful question can be raised with regard to many other areas of American life. Once the world’s greatest creditor, we are now the biggest debtor in history. We have a unbroken string of trade deficits since 1976, adding up to almost $10 trillion dollars. Our industries have not expanded plant and equipment for a decade or more. Standards of performance, accountability and ethics are slipping in every sector, it seems. Our politics are gridlocked. Generation-old problems go unaddressed while elected officials posture and squabble. Our infrastructure is increasingly antiquated and second-class. Our tax system is out of step with the rest of the world, providing scant reward for the added saving, investing, producing and exporting that we need on a sustained basis.
We govern ourselves as if neither foreign competition nor shared prosperity matter. We think of ourselves as exceptional. In practice, we lack purpose and vitality and are weak and irresolute. The world has ample reason to laugh at us. But America’s fecklessness is no laughing matter.
During an all-night negotiating session in Geneva years ago, a veteran Asian ambassador said to me: “America is great because America is good.” For years, I recalled those words as a reflection of the respect and gratitude that America deserved for its principled, far-sighted and dedicated leadership and the dynamism and high standards of its people.
With the benefit of 30 years’ additional experience, I would amend the ambassador’s statement: America is great when America is good. These days, it falls way short of what it could be, what average Americans want it to be, and what the rest of the world needs it to be.