http://www.newsweek.com/id/166821- Cover
 

COVER: BOOK EXCERPT-"THE GREAT INFLATION AND ITS AFTERMATH: THE PAST AND FUTURE OF AMERICAN AFFLUENCE"
By ROBERT J. SAMUELSON
  
'AMERICA'S NEXT PRESIDENT TAKES OFFICE FACING THE MOST DAUNTING ECONOMIC CONDITIONS IN DECADES'

A FUTURE OF SLOW ECONOMIC GROWTH AND 'AFFLUENT DEPRIVATION' IS AHEAD

 New York-"America's next president takes office facing the most daunting economic conditions in decades: certainly since Ronald Reagan and double-digit inflation, and perhaps since Franklin Roosevelt and 25 percent unemployment," writes Newsweek Contributing Editor Robert Samuelson in an adaptation of his new book, "The Great Inflation and Its Aftermath: The Past and Future of American Affluence," in the current issue.  Samuelson speculates that the current crisis is only one of a series of challenges, including global warming and an aging society, that signal a future of slower economic growth.  Our new economic era may lapse into a state of "affluent deprivation," which Samuelson describes not as actual poverty but rather a state of mind in which people feel poorer, even as the United States remains a wealthy society.  "Whatever happens, the future of American affluence will be a state of mind as much as a state of production. So much of our national identity is wrapped up in economic progress that the failure to achieve it in palpable quantities would sap Americans' self-confidence," writes Samuelson in the November 10 Newsweek cover, "The Future of Affluence" (on newsstands Monday, November 3). 

"The good news is that even if the present slump deepens (an 8 percent peak jobless rate would make it the third worst recession since World War II), the odds are that it won't approach the Great Depression in severity or suffering. Too much attention is being paid," Samuelson writes.  "The bad news is that recovery, though boosting employment, may prove unsatisfying."

"What the new president, and everyone else, needs to understand is that the present crisis marks the end of an economic era. For nearly a quarter century, the U.S. economy benefited from the expansionary side effects of falling inflation-lower interest rates, greater debt, higher personal wealth-to the point now that we have overdosed on its pleasures and are suffering the proverbial hangover. In our zeal to identify the villains of the present economic debacle, we ought to recognize that the larger causes lie in this prolonged prosperity and the permissive attitudes and practices it inspired," Samuelson writes.                        

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