What if members of the United States Congress, nowreturning from their summer recess, were toreceive a “back to school” letter from concerned citizens? Here is what a firstdraft might look like.
Dear Member of Congress:
Welcome back to the Capitol. We hope that you had a goodsummer break, and that you return to Washingtonnot just rested, but also energized to take onour country’s mounting economic challenges.
The news has been mixed during your absence. We have seensome improvement in economic data, but not enough to suggest that we are anycloser to overcoming decisively this painful period of low growth and highunemployment. And, with a self-inflictedfiscal cliff looming – one that could send our country back into recession, pulling the rest of the world with us –businesses are reluctant to hire and invest in new capital goods. Fortunately,the Federal Reserve has signaled its intention to remain active, but its policytools are poorly suited to the challenges that we face.
Meanwhile, global difficulties remain substantial. Wecontinue to face strong headwinds originating from the deepening European debtcrisis, as well as geopolitical tensions in the Middle East. China,once the world’s unstoppable growth engine,is slowing. And, despite all the happy talk, multilateral policy coordinationis essentially non-existent.
All of this calls for courageousand visionary economic leadership;otherwise, our problems will fester andgrow, and the solutions will become even more complex. Already, too many of oureconomy’s difficulties, including worrisome trends in youth joblessness andlong-term unemployment, risk becoming structurally embedded.
No doubt you have also noticed that, with less than tenweeks to go until the November presidential election, our country is in thegrip of an increasingly ugly political campaign. So, with this combination ofbad economics and bad politics, we look to you for direction and leadership. Itis that simple, and that important.
We need you to overcome a prolongedperiod of congressional paralysis and polarization in order to address the country’s malaise. We need you to pivotin your responses from the tactical to the strategic, from the cyclical to the secular,from the partial to the comprehensive, and from sequentialto simultaneous reforms.
If this call to national duty is not enough, we wouldremind you of your own self-interest. According to the latest NBCNews/Wall Street Journal poll, your support among us, the electorate, stands at just 12%.
We concede that there isno magic wand to overcome our country’sproblems. After all, for too many years leading up to the global financialcrisis, America“bought” and “borrowed” its growth by leveraging balance sheets, rather than“earning” it through increased competitiveness. The result was massivemisallocation of human resources, insufficient infrastructure investment,over-reliance on credit entitlements, and, of course, unsustainable debt. Tomake matters worse, this occurred at a time when systemically importantemerging economies hit their “developmental breakout phase,” powered by tradeand other aspects of globalization.
We do not expect you to solve America’s problems overnight.Instead, we look to you to embark on anappropriate and sustainable policy path. So, as you unpack your bags and renewold friendships and rivalries, please keepthe following in mind.
Changing course requires that you, together with thepresident, have a much more open and consistent economic dialogue with us, thegeneral public, about the challenges that we face. It also requires that you andthe president converge on a multi-prong, multi-year policy initiative that, at aminimum, makes simultaneous advances in six critical areas:
Fiscal reform: Wedesperately need you to eliminate the looming fiscal cliff in the context ofmedium-term reforms of both the tax system and entitlements. This would alsoallow for greater fiscal stimulus at a time when other components of aggregatedemand are slowing.
Labor-market reform:Persistently high unemployment and large-scale withdrawal from the labor forceare a constant reminder of a malfunctioning labor market that needs supportthrough better training and retooling.Reform must also address the related challenges of a lagging education systemand an insufficient social safety net.
Housing and housing finance:At the root of the global financial crisis, the troubled US housingmarket continues to act as a millstone around the economy’s neck. The longerthe problems persist, the greater the pressure on consumer and businesssentiment, and the harder it is for the unemployed to find and relocate to newjob opportunities.
Clogged credit pipes: Withbanks’ balance sheets contracting, too many small and medium-size companies areunable to mobilize credit for investment and growth. Recognizing that it willtake years until banks are properly stabilized, America needs to build new conduits for credit.
Infrastructure: Those of youwho have traveled abroad know that our infrastructure is desperately laggingthat of a growing number of countries. This makes it even harder for ourcompanies to compete and prosper.
Global policy coordination: America’straditional leadership role has evaporated in recent years as our problems havemade us more insular and inward-looking. This would not be a major problem ifthe resulting vacuum had been filled. But that has not happened. On thecontrary, the G-7 has lost relevance, the International Monetary Fund is hampered by its representationand legitimacy deficits, and the G-20 is still finding its feet.
Engineering such an agenda is not an overwhelmingchallenge. But that will provide little comfort if you, our electedrepresentatives, do not collaborate effectively.
The choice Congress faces this term is simple: eitheraddress head on America’schallenges, or risk being remembered as the body whose ditheringcondemned future generations to being worse off than their parents.
Yours sincerely,

Concerned citizens