ABSTRACT
In the second half of the twentieth century, the primary task of American economic policy was to manage prosperity. In the second decade of the twenty-first century, however, the economic challenge facing the United States is to renew prosperity in the wake of the deepest recession since the 1930s. The modern US economy had always rebounded from previous travails. The Great Depression gave way to post-war plenty, and 1970s stagflation was succeeded by economic revitalization in the late twentieth century. In contrast, the weak recovery that followed the Great Recession of 2007–09 engendered gloomy forecasts that the US would take years to regain economic vigour and was entering an era of relative economic decline in the face of the rise of new powers like Brazil, India and – most notably – China. This chapter offers an outline analysis of economic management during twentieth-century prosperity, considers the records of the George W. Bush and Barack Obama administrations in dealing with twenty-first-century economic challenges, and assesses US prospects of economic renewal in the wake of the Great Recession.
