[Economic Report of the President (2011)]
[Administration of Barack H. Obama]
[Online through the Government Printing Office, www.gpo.gov]

 
CONTENTS
Page
CHAPTER 1. FROM CRISIS TO RECOVERY AND GROWTH...................    19
The Year in Review and the Years Ahead......................    22
The Foundations of Growth...................................    23
The World Economy...........................................    24
Health Reform...............................................    25
Energy Policy...............................................    25
Supporting America's Small Businesses.......................    26
CONCLUSION....................................................    27


CHAPTER 2. THE YEAR IN REVIEW AND THE YEARS AHEAD...............    29
DEVELOPMENTS IN 2010 AND THE Near-Term OUTLOOK..............    30
Consumption and Saving....................................    30
Developments in Housing Markets...........................    33
Business Fixed Investment.................................    37
Business Inventories......................................    38
Government Outlays, Consumption, and Investment...........    40
State and Local Government................................    43
Real Exports and Imports..................................    44
Labor Market Trends.......................................    45
Prices....................................................    49
Financial Markets.........................................    50
THE Long-term OUTLOOK.......................................    51
CONCLUSION..................................................    52


CHAPTER 3. THE FOUNDATIONS OF GROWTH............................    53
THE IMPORTANCE OF ECONOMIC GROWTH...........................    53
SOURCES OF ECONOMIC GROWTH..................................    55
INNOVATION AND ECONOMIC GROWTH................................    57
Basic Research..............................................    58
Intellectual Property Rights................................    60
Antitrust and the Innovative Marketplace....................    61
The Research and Experimentation Tax Credit.................    62
Entrepreneurship............................................    62
National Priority Areas.....................................    63
INFRASTRUCTURE AND ECONOMIC GROWTH............................    64
Roads, Railways, and Runways................................    65
Electricity Infrastructure..................................    66
Information Networks........................................    67
SKILLS AND ECONOMIC GROWTH....................................    69
Early Childhood Education...................................    72
Elementary and Secondary Education..........................    73
Higher Education............................................    76
Job Training................................................    78
CONCLUSION....................................................    79


CHAPTER 4. THE WORld ECONOMY....................................    81
STATUS OF THE WORLD RECOVERY................................    82
Crisis Fading, But Challenges Remain......................    82
The Rebound in World Trade................................    86
Global Policy Coordination................................    87
THE EVOLUTION OF THE WORLD ECONOMY..........................    89
Global Imbalances.........................................    89
Determinants of Exports...................................    94
Evolving U.S. Trade Patterns..............................    97
TRADE POLICY................................................   103
Negotiating to Open New Markets...........................   103
Encouraging Exports by Enforcing Existing Agreements......   107
Advocacy to Encourage Exporters, Credit, and Trade
Facilitation..............................................   109
CONCLUSION..................................................   110


CHAPTER 5. HEAlTH CARE REFORM...................................   111
ADDRESSING THE RISING COST OF MEDICAL CARE..................   114
Trends in Aggregate Health Spending.......................   114
Technological Change and Increases in Health Spending.....   115
Market Imperfections and Increases in Health Care Spending   115
How the Affordable Care Act Promotes High-Value
Medical Care..............................................   116
IMPROVING THE HEALTH INSURANCE MARKET.......................   118
Problems in the Market for Health Insurance...............   119
How the Affordable Care Act Addresses the Insurance Market
Failures..................................................   120
Employers and the Affordable Care Act.....................   122
Expanding Medicaid........................................   122
CONCLUSION..................................................   123


CHAPTER 6. TRANSITIONING TO A ClEAN ENERGY FUTURE...............   125
INITIAL STEPS TOWARD a CLEAN ENERGY ECONOMY.................   128
Energy Investments in the Recovery Act....................   128
Further Steps Toward a Cleaner Economy....................   130
NEXT STEPS TOWARD a CLEAN ENERGY ECONOMY....................   134
A Federal Clean Energy Standard...........................   134
Energy Efficiency.........................................   136
Transportation............................................   138
Research and Development..................................   139
CONCLUSION..................................................   140


CHAPTER 7. SUPPORTING AMERICA'S SMAll BUSINESSES................   143
IMPACT OF THE RECESSION ON SMALL BUSINESSES.................   144
Job Creation..............................................   144
Financing Small Business..................................   145
Changes in Availability of Credit and Capital for Small
Business..................................................   146
ADMINISTRATION POLICIES TO SUPPORT SMALL BUSINESS...........   150
Tax Cuts for Small Business...............................   150
Initiatives to Increase Access to Credit..................   151
Policies to Encourage Greater Access to Capital...........   154
CONCLUSION..................................................   156


REFERENCES......................................................   157

APPENDIXES
A.  Report to the President on the Activities of the Council of
economic Advisers During 2010...............................   165
B.  Statistical tables Relating to Income, employment, and
Production..................................................   179


LIST OF FIGURES
1-1.  Unsustainable Expansion: Recent Boom vs. Past Booms.......    20
1-2.  U.S. Export Growth Lagged Other Top Exporters, 2000-2005..    21
1-3.  U.S. Investment Growth Lagged Other Major Economies,
2000-2005.................................................    22
2-1.  Real GDP Growth by Quarter................................    29
2-2.  Consumer Sentiment and the Stock Market...................    30
2-3.  Consumption and Net Worth Relative to Disposable Personal
Income (DPI)..............................................    31
2-4.  Banks' Willingness to Lend to Consumers...................    32
2-5.  House Prices..............................................    34
2-6.  Share of Mortgages in Foreclosure.........................    36
2-7.  Business Fixed Investment and Cash Flow...................    38
2-8.  Inventory Investment and its Contribution to Real GDP Growth  39
2-9.  Manufacturing and Trade Inventories.......................    40
2-10. Deficit as a Share of GDP.................................    42
2-11. U.S. exports and World GDP................................    44
2-12. Path of Non-Census Employment in the Past Three Recessions    45
2-13. Path of Non-Census Employment Since the End of the Recession  46
3-1.  Progress in U.S. Real Income Per Person Since 1820........    54
3-2.  E-Commerce Share of Business-to-Business Manufacturing
Shipments.................................................    67
3-3.  Broadband Adoption across OECD Countries..................    68
3-4.  Average Wage and Salary Income by Educational Group.......    71
4-1.  Real GDP Growth...........................................    83
4-2.  Unemployment Rate.........................................    85
4-3.  Import Volume Indexes.....................................    86
4-4.  Export Volume Indexes.....................................    87
4-5.  Current Account Deficits or Surpluses as a Share of World GDP 91
4-6.  U.S. Exports by Sector....................................    95
4-7.  U.S. Trade in Services....................................    96
4-8.  Share of U.S. Goods exports to Mature Foreign Economies...    98
4-9.  Share of U.S. Goods exports to Major Emerging Economies...    99
4-10. Share of U.S. Goods Imports by Foreign Source.............   100
4-11. U.S. export Growth vs. Foreign GDP Growth,
2009:Q2 - 2010:Q2.........................................   101
4-12. Projected Share of U.S. Nominal export Growth, 2009-14....   102
4-13. U.S. trade Disputes at the WTO............................   108
5-1.  GDP and Health Spending...................................   114
5-2.  Percent of Americans Uninsured............................   119
6-1.  U.S. Wind, Solar, and Geothermal Energy Generating Capacity  132
6-2.  State Renewable Energy Standards in 2025..................   136
7-1.  Births, Closures, and Bankruptcies of Firms...............   144
7-2.  Bank Lending to Small Business............................   146
7-3.  Most Important Problem Facing Small Businesses in 2009....   147
7-4.  Venture Capital Investment................................   148
7-5.  U.S. Initial Public Offerings.............................   149
7-6.  SBA-Backed Loan Approvals.................................   152


LIST OF TABLES
2-1.  Administration economic Forecast..........................    51
2-2.  Components of Potential Real GDP Growth, 1953-2021........    52
4-1.  Import Tariffs, Nontariff Measures, and Trade Restrictiveness,
2008......................................................   104


LIST OF BOXES
3-1.  Technological Progress and the Advance of Health..........    56
3-2.  The Power of Market-Based Innovation......................    58
3-3.  The Social Gains from Innovation..........................    59
3-4.  SteM education and educate to Innovate....................    75
3-5.  America's Universities: Leading the World.................    77
3-6.  Skills for America's Future...............................    79
4-1.  What Do We Owe the Rest of the World?.....................    92
4-2.  the Korea-United States Free trade Agreement..............   105
5-1.  early Provisions of the Affordable Care Act...............   113
6-1.  energy Security Benefits of Reduced Oil Consumption.......   126
6-2.  Clean Energy Investments in the Recovery Act..............   129
6-3.  The Recovery Act and ARPA-E: Spurring Innovation to transform
the energy economy........................................   131
6-4.  The Social Cost of Carbon: A Tool for Cost-Effective Policy  133