The United States is dependent on fossil fuels for almost all its energy supply. Coal dominates electricity generation, accounting for half of its power production, with nuclear and natural gas around one-fifth each.

Healthy gains in private consumption have helped to keep GDP growth above trend so far this year. However, the correction in residential construction is likely to accelerate over the near term, and housing wealth could decline which, together with weaker labour market conditions, could lead to lower consumption growth over time. Real GDP growth should therefore slow to a pace below potential in 2008 and then recover in 2009, although there are considerable downside risks. Headline inflation has recently moved up, but core inflation seems to have stabilised near 2% and, assuming that energy prices level out, inflationary pressures should remain fairly moderate over the projection period.

Few economic questions in recent times have challenged policymakers and economists the world over quite as much as the US current account deficit. Some worry that it is a global economic time bomb. More recently, a contrasting argument has emerged that dismisses the deficit as little more than a harmless mirage. But most serious experts simply agree that the present situation is unsustainable. What has caused the deficit? Why is it a problem and how should it be dealt with?

One of the most striking paradoxes of today’s OECD societies is that, although people live longer and healthier, they also tend to retire earlier and younger. The trend in the US is not as marked as in some countries, but it is there nonetheless. By 2030, almost a fifth of the American population is projected to be aged 65 and over, compared with around an eighth only five years ago.

Why is it that US consumers are willing to spend more of their higher incomes on buying imports than is the case for foreigners on US exports?

Constance Morella has taken up the post of US ambassador to the OECD, succeeding Jeanne Phillips. Mrs Morella was the first woman member of the Maryland state legislature to be elected to the US Congress, where she represented Maryland in the House of Representatives from 1987 until January 2003.

Your series on the future (40th anniversary edition, OECD Observer No. 235) raises interesting views about models for prosperity, growth and recovery. But a view from the ground paints a less optimistic picture.

An opinion poll in BusinessWeek magazine shows half of the US believing that what is good for business is not necessarily good for their country. Hardly surprising, you might think – except that the poll was carried out over two years ago, before the high-tech bubble burst and well before the recent corporate scandals. And the fact that the opinion poll was in one of the US’s main pro-business magazines meant that the results simply had to be taken seriously.

President Bush has called on the US senate to vote on renewed presidential Trade Promotion Authority (TPA). What does it mean? TPA (which went under the name of “fast-track authority” in the 1990s) would ensure that any trade agreement negotiated by the president would be considered by Congress as a single package. Naturally, Congress would maintain the final authority on whether to approve or reject the negotiated agreement, but under this expedited process, Congress would agree to consider the legislation as a whole, with mandatory deadlines, no amendment and limited debate.

Who would have thought it? After two decades during which government economic activity has been under attack, even on the retreat, there is a renewed and vigorous interest in fiscal policy in the United States. This is partly because of the serious events of 2001 that reminded us of the value of government, but it is also due to the recession, which has highlighted government’s role in stabilising market economies.

Only a few OECD countries have a lower ratio of tax revenue to GDP than the United States, and the programme of medium-term tax cuts introduced last year will lower taxation even further. Nonetheless, there exist several areas where reforms are desirable: first, the income tax system is very complex; second, incentives to work, save and create new businesses may still be harmed; and third, the higher proportion of revenues that comes from taxes on income rather than on consumption may be inefficient in the long run.

"On a day like this, I wonder: what would the world be like without America, without the US. A darker place, certainly." Anders Ferm, Swedish ambassador to the OECD, September 14, 2001, to colleagues at Chateau de la Muette before the three-minute silence in mourning for those killed in the terrorist attacks on the United States on September 11.

Shocked by these unconscionable terrorist attacks, but resolute in defence of democratic and open societies, based on the universal values of freedom and human dignity. This was an act of terrorists, not an Arab attack, and we must reject anti-Arab retaliation or discrimination.

Playwright Arthur Miller called the attacks a war against the human race. Speaking to a French daily, Le Monde, he said the attacks were by madmen in love with death. “It is so easy to destroy a town. The extreme vulnerability of New York with its towers, its bridges and its tunnels strikes me every time I cross the city.”

Democracy itself and the values of freedom and tolerance were the real target of these attacks on humanity.