By Fareed Zakaria
Historically, when the U.S. government, World Bank or International Monetary Fund have advised troubled countries, they have stressed that achieving fiscal stability is only part of the solution. The key to reviving growth is structural reforms to make an economy more competitive, as well as investments in human and physical capital to ensure the next generation for growth. Yet we have been unable to follow our own prescriptions.
The United States could become more competitive in many areas. Our gargantuan and corrupt tax code clocks in at 73,000 pages, including regulations. Vast aspects of the economy, such as agriculture, receive massive and distorting subsidizes for no larger national purpose. Regulations in industries such as finance are highly complex, and sometimes worse, with banks being supervised by multiple federal agencies and 50 sets of state agencies, all with overlapping authority.