And it is quite possible that even this much more modest debt forecast could be mistaken, especially if economic growth beats expectations. The government could promote such growth by spending on infrastructure, education, and research and development. While Congress struggled to find the political will for these investments a few years ago, when the federal budget deficit was well over $1 trillion, deficits have fallen dramatically since then. The bipartisan budget agreement signed into law last month was a first step toward restoring funding to some of the key programs economists believe have high returns over time.
There are no guarantees. From looming demographic changes to the economic threats posed by advanced technology, we should be realistic about the challenges we face. But there are also reasons to believe that the next generation will prosper. There’s probably nothing that forces middle-class wages to rise faster than competition among companies for better-educated workers who are able to use more sophisticated technology. And while we have recently suffered through an age of growing apart, the forthcoming era could well be one of growing together.