The world is changing. Policy needs to change with it.
Since 2007, the working population in the US has largely stagnated and appears unlikely to regain its dynamism soon.
Productivity growth has been slowing in recent decades and has been notably weak in the last decade.
an aging society
The US is turning gray. By 2030, 25 million more Americans will have turned 65 years old.
Since the FDR administration, US government policy innovations have, almost without exception, involved greater government spending and regulation. This period is coming to a close.
Many programs, like Social Security and Medicare, were predicated on a large number of taxpayers supporting a relatively small number of recipients who died not too old and consumed not too much healthcare in the interim. Today, these assumptions are no longer true. Birthrates in the advanced countries are barely holding population even -- and indeed, leading to outright population declines in much of Europe and Japan. In the US, the working age population is just about holding steady, but at labor participation rates lower than during the previous twenty years.
At the same time, the elderly population has been surging, in the 2000s in Japan, and between now and 2030 in the US. Indeed, in the next 13 years, some 25 million Americans will reach retirement age -- the equivalent of three New Jerseys -- putting an unprecedented strain on Social Security and Medicare, and the willingness and ability of taxpayers to carry the load.
Finally, productivity growth has been notably weak in the last decade, and has been in secular decline since the 1980s. This matters, as GDP growth is a function of the growth of the workforce and improving productivity of workers.
Thus, the US is facing the twin challenges of structurally lower GDP growth confronting rapidly increasing calls on its federal budget.
Notwithstanding the fiscal policy of the current administration, the US will not be able to solve societal stresses with more spending and debt, as we have since the Reagan administration. Nor is it clear that taxes can be materially raised from current levels. Thus, both egalitarian and big government conservative policies may have run their course.
Instead, we are going to require innovative solutions beyond traditional left-right thinking to address societal challenges in a conservative era dominated by older Americans living in a constrained economy.
Our mission is to identify and develop some of those new approaches and bring a new perspective to old problems. Whereas almost all new ideas were liberal in nature during the last century, today the opportunities for innovation arise primarily on the conservative side.