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Economics

Why The Economy Is A Lot Stronger Than You Think

In a knowledge-based world, the traditional measures don't tell the story. Intangibles like R&D are tracked poorly, if at all. Factor them in and everything changes

By Michael Mandel, with Steve Hamm in New York and Christopher J. Farrell in St. Paul, Minn.

You read this magazine religiously, watch CNBC while dressing for work, scan the Web for economic reports. You've heard, over and over, about the underlying problems with the U.S. economy -- the paltry investment rate, the yawning current account deficit, the pathetic amount Americans salt away. And you know what the experts are saying: that the U.S. faces a perilous economic future unless we cut back on spending and change our profligate ways.