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This report explains why U.S. policymakers must reduce all three deficits, not just the budget deficit, through targeted public investment in innovation, productivity, and competitiveness.

Federal policymakers are consumed by a debate over how to reduce the nation's budget deficit, which some argue is critically important to the nation's economic future. As the President's National Commission on Fiscal Responsibility and Reform noted in its final report, "America cannot be great if we go broke. Our economy will not grow and our country will not be able to compete without a plan to get this crushing debt burden off our back." Yet an oftentimes myopic focus on the budget deficit has obscured the fact that America actually faces three deficits—the budget deficit, the trade deficit, and the investment deficit—that, if left unchecked, could total over $41 trillion in the next 10 years. Reducing all three deficits, not just the budget deficit, is critical to future economic prosperity

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