Investment in Innovation

Can the American economy achieve sustainable prosperity --a progressive spreading of the benefits of economic growth to more and more people over a prolonged period of time? During the first half of the twentieth century, despite the debacle of the Great Depression, the United States emerged as the world's most powerful industrial nation. In the 1950s and 1960s the United States had not only by far the world's highest per capita income, but also a distribution of income that, until the early 1970s, showed continual improvement. Since then Japan has mounted a dramatic challenge to the economic leadership of the United States and the U.S. income distribution has become increasingly unequal (Maddison 1994; Danziger and Gottschalk 1996). In the 1980s the United States had the widest income gap between rich and poor of all the advanced industrial economies (Atkinson, Rainwater, and Smeeding 1995)