If the US and Chinese economies move at their present rates, the average Chinese citizen will be wealthier than the average American in less than three decades, Ed Lazear, a Stanford University economics professor, told CNBC Thursday.
“We are talking about a very different world if we don’t get our growth rates back up with the kinds of policies that are aimed toward long-term growth, rather than the policies that fix things for the next six months,” said Lazear, who was the chairman of the President’s Council of Economic Advisors under George W. Bush.
“It means keeping taxes low, getting the fiscal situation in order, keeping spending down, having a positive climate for business and investing in human capital.”
Lazear said that with the current growth, Americans and Chinese would be on par in 27 years, but he did not offer a reason for the time frame or give the source of his calculation.
He added that significant market reforms, not state capitalism, spurred growth of both China and India. “It was the move away from the state running the economy that got them [China and India] to take off,” he said. “That’s the best evidence for the effect on the market for economic growth.”