No Free Lunch

By Peter G. Peterson
The National Interest

July/August 2007

While the United States is unquestionably the world’s pre-eminent military power, Mr. Pete Peterson questions whether America’s culture of instant gratification and obsession with the short-term is sustainable economically. In the July/August 2007 edition of The National Interest, Peterson argues that the high current account deficits, rising foreign-debt, the current health-care costs associated with Medicare, and our “energy gluttony” amount to unsustainable economic behavior in the long-run that require reform. Yet, he asks, is a democratic society fixated on the short term and the next election capable of dealing with silent, long-term challenges that have no major negative consequences today?

In soft power terms, Peterson observes that other economic blocks such as Europe and China are assuming greater roles in an increasingly multi-polar global system. In order to restore global power, Peterson rejects protectionism and fears of globalization, recommending instead domestic reforms in the education and social system. Yet it goes both ways, Peterson argues: in addition to prudent economic behavior in the US, the rest of the world should consume more, stimulating their own domestic demand rather than relying on exports to the US. Placing this new premium on international cooperation is a critical means of restoring global economic and political influence.

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*This article is featured in the AP Fall 2007 Newsletter.