As The U.S. Puts More Into Business, Rivals Spend Less

If there's one thing that economists agree on, it's that business investment is critical for determining a nation's long-run competitiveness and economic prospects. From that perspective, the U.S. lagged far behind its major competitors in the late 1980s and early 1990s. Business investment in the U.S. from 1988 to 1991 averaged only 11% of gross domestic product, compared with 20% in Japan and 15% in Germany. Small wonder, then, that many pessimists saw the U.S. doomed to second-class economic status in the years to come.

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