Over the last few years, a number of reports and books have appeared making the case that the United States is in decline. All of these studies and books contain elements of truth, although we need to keep in mind the distinction between absolute and relative decline and to remember that relative decline, if it is in fact occurring, may not be such a bad thing.

At first glance, it seems clear that the U.S. economy is declining in relative terms. China has had an annual growth rate averaging 9 percent or 10 percent for more than 30 years and India 6 percent to 7 percent since the early 1990s, while the U.S. has averaged about 2 percent annually over the past decade.

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