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

• Author: Savitsky, Linda R.

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...