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Reviving the American Dream: The Economy, the States & the Federal Government.

Alice Rivlin provides the reader with a thoughtful blueprint for changing the relationships between the federal and state governments for the 1990s. She lays out for the reader a straightforward and pragmatic approach to resolving some of the major economic challenges that this country is facing. Her discussion is particularly relevant in light of her appointment as Deputy Director of the Office of Management and Budget to serve under President Clinton.

She begins by providing historical perspective of major economic policies and discusses the evolution of American federalism. She alerts the reader of her personal biases that clearly influence her conclusions. She discusses how the lack of a coherent policy delineating federal and state fiscal responsibility contributes to the erosion of the American dream. She analyzes the relationship of global interdependence to the U.S. economy, recognizing that any long-term economic solutions will require U.S. leadership to change its style of management in dealing in a multi-national economy. She develops long-term goals for this new economy.

Her style of writing is simple, straightforward and easy to understand. She uses graphs liberally throughout the text; they are particularly effective as she provides the reader with a historical basis for her recommendations.

One of the main themes of her book is that the federal government has grown too large and has assumed too many functions that need to be returned, or devolved, to the states. This situation evolved from the time of the Great Depression to the beginning of the Reagan years in the early 1980s, and she offers reasons for this occurrence. She introduces the concept of "dividing the job," which is her solution to restructuring the federal-state relationship.

Rivlin recognizes that, as resources from the federal level have become more scarce, state and local governments have strengthened their revenue systems and diversified them. Without changes in interstate relationships and a new approach to revenue structures, however, she asserts the states will not continue to have adequate resources to accept the responsibilities that the federal government passes along. Proposing the use of common shared taxes, she discusses the various types of these taxes and their economic and political consequences.

A main theme throughout is that the growing magnitude of the federal deficit must be stopped. She advocates maintaining a strong Social Security system and argues the need to strengthen the social insurance system. She offers her recommendations for reforming the health care system--an area that she feels the federal government is better suited to manage than are the states. This is critical to her discussion of balancing the budget.

Reviving the American Dream is worthwhile reading for any individual interested in a cogent, thoughtful discussion of our economic and political future. Rivlin, the first Director of the Congressional Budget Office, has written this book in such a manner that practitioners of government at all levels will be able to read and discuss her solutions without needing an economics or political science textbook. It should be of particular interest to members of the new Congress as they grapple with a new President and his administration's solutions to reviving the economy. Rivlin's role in the new administration provides her with an opportunity to shape future economic policy in her image. It will be interesting to watch the process evolve as the new administration begins to reshape the economic landscape. This book provides local and state officials insight into what may come from Washington as the Clinton administration takes office and develops its economic agenda.

Reviving the American Dream is available for $15.95 from The Brookings Institution, P.O. Box 029, Washington, DC 20042-0029 (202/797-6258.).
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Author:Savitsky, Linda R.
Publication:Government Finance Review
Article Type:Book Review
Date:Apr 1, 1993
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