Treasury Secretary Jacob Lew has urged more US private and public investment as well as regulatory reforms to boost economic growth for the longer term.
Saying the economy could face a long period of slower growth after the rebound from recession, Lew argued that the picture could be brighter with a concerted effort to stir productivity, upgrade the workforce and create a more attractive US environment for investment.
He told an audience at the Economic Club of New York that, according to government projections, the economy is facing a growth rate in the future averaging 2.1 per cent, compared with the 3.4 per cent rate in the six decades to 2007.
"But here is something we know: The choices we make over the years to come can alter this projection," he said, according to his prepared remarks.
Lew laid out a list of things the government needs to do to encourage investment: reform corporate taxes and patent laws, invest in crucial infrastructure, expand education opportunities, do more to encourage businesses to train workers, and provide more support for research and development.
Many of those are on the Obama administration's shortlist of policies it wants to get support for in Congress, Lew noted.
But he stressed that the private sector, where profits and cash stockpiles are running high, but investment in activities that boost production and create jobs remain low, must also contribute.
"The private sector is the defining feature of our economy and the joining of sound policy with a surging private sector will determine our economic future," he said.
"American businesses are sitting on historically high levels of cash and what we need now is for businesses... to come off the sidelines and make investments in our future."
Lew said economists "all agree about what determines the long-run success of an economy. The labour force, the capital stock, and technological innovation."
"If we take the right steps, our economy will be primed to take advantage of the next innovation," he said.
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