The world's developed economies, of which the United States is by far the largest and systemically most important, face a range of difficult political and social choices. President Barack Obama's proposed U.S. budget acknowledges and addresses those choices and tradeoffs directly and fully for the first time in the postcrisis period.
Obama's proposal is an important, honest and politically courageous document. The debate that follows will largely determine whether the U.S. shifts toward a strong, inclusive and sustainable pattern of growth and employment, and how the burden of moving to such a path will be shared by Americans of various ages, educational levels, incomes and wealth.
We know that powerful technological and global market forces have reduced dramatically the number of routine professional and blue-collar jobs, shifted employment options for the middle class toward the nontradable side of the economy, and channeled growth in national income toward capital and high-end employment, with stagnating income elsewhere.