Morning Brief: Progress in U.S. Household Deleveraging

Debt and Deficits

Progress in U.S. Household Deleveraging

A report from the McKinsey Global Institute examined the deleveraging progress in the United States, the UK, and  Spain, and offers a comparison to past (1990's) recoveries in Sweden, Finland, and South Korea. U.S. households have experienced the most significant debt reduction out the countries reviewed, with defaults representing from 70 to 80 percent of the decrease. The report suggests U.S. households could be halfway through the deleveraging process, with one to two years to go.

Ron Haskins of the Brookings Institution says that the economy and the budget deficit are the biggest issues in the 2012 election. The next president, he recommends, should take the following steps to address the deficit crisis: open bipartisan talks where everything is on the table; push for control of Medicare spending along the lines of existing bipartisan proposals; and reform the budget process- specifically reinstitute "paygo" requirements for all future spending programs.

Debt and deficits. America's debt is rising at an unprecedented rate and the response will require tackling some of the thorniest issues in U.S. politics --taxes and entitlement spending. Leading experts assess the challenges in reducing U.S. debt.

Infrastructure

Louisiana Infrastructure at Risk

A report released by the Louisiana Section of the American Society of Civil Engineers (NOLA) says the state's infrastructure is inadequately maintained and below average in most areas. The 2012 Report Card  grades nine areas of state infrastructure-- Louisiana scored above average in only two: dams (B-) and solid waste systems (C+).

The American Society of Civil Engineers says the 112^th Congress has made little progress on key legislation, but adds that infrastructure could be a top priority in 2012. Issues facing Congress in the near term include a reauthorization of the Federal Aviation Administration (FAA) and surface transportation authorization.

This CFR Backgrounder says an overhaul of U.S. transportation infrastructure may help spur the economy, improve global competitiveness, and address homeland security needs. But the Obama administration's initial effort falls short of setting a true national transportation agenda.

Infrastructure. Upgrading the nation's aging network of roads, bridges, airports, railways, and water systems as well as infrastructure related to energy security is seen as essential to maintaining U.S. competitiveness. Experts at the forefront of policy discussions recommend how to pay for this.

Education and Human Capital

Teacher Feels Time Constraints in the Classroom

Linda Yaron of Teacher Week calls for an overhaul in the way the nation's teachers are recruited, prepared, and trained. The current educational structure, she says, does not provide teachers with adequate time to perform their myriad tasks including teaching, grading, planning, and building parent and community relationships.

Education and human capital. An education system beset by falling student performance and a flawed immigration system threaten U.S. capacity to develop a competitive workforce. Experts spell out ways of improving education and immigration policies.

Innovation

EU-U.S. Innovation Partnerships

The European Commissioner for Research, Innovation and Science, Máire Geoghegan-Quinn, delivered a speech in Washington, DC, outlining how innovation is central in job creation and economic growth. She noted particular areas where EU-U.S. collaboration in research is playing an active role, such as the partnership between the EC's Institute for Energy and Transport and the U.S. Departments of Energy and Commerce.

Innovation. In the face of robust challenges from emerging markets such as India, Brazil, and China, the U.S. capacity to innovate could play a chief role in economic growth. Specialists on research and economic competitiveness examine how to spur innovation.