“If we want to remain one of the richest nations on Earth and get the benefits associated with that, we have to remain highly skilled,” Hoxby said. “We need an educational factory that produces people with skills. That is something we do not have.”

She said that while the United States has doubled its educational funding since 1970 without seeing marked improvements, other countries have improved their students’ performances without increasing education spending during that same time.

“We need to require that everyone acquires a certain level of skills. It is not enough that they go to school and stay there for four years,” Hoxby said.

But Hoxby cautioned that she is unsure that the testing mandated by the controversial No Child Left Behind Act is the best solution to the problem.

Hoxby said the No Child Left Behind Act marked a step forward in legislation because it mandated that all children receive a certain minimum educational level and set a deadline to achieve that goal.

But Hoxby said certain elements of the law are broken.

She said the measurement for determining whether a school is succeeding or failing is often misleading and needs to be fixed by statisticians. She also faulted No Child Left Behind for setting goals without offering practical ways to achieve them. For example, she said, the law decrees that every teacher should be qualified without discussing incentives like raising salaries to improve the overall quality of teachers.

MacArthur Professor of Health Policy and Management Joseph P. Newhouse said the funding of Medicare is the major issue that needs to be addressed, given the current economic forecasts.

Newhouse said Medicare, which currently accounts for 13 percent of government spending, will rise to 16 percent of government spending by the 2020s, according to analysts. He said the government might have to raise taxes by as much as 16 percent to make up for the increased spending—a politically unpopular stance.

“There is no reason to believe the increased costs in medical care we’ve seen are going to stop,” Newhouse said.

Newhouse added that each candidate’s campaign pledge to cut the deficit in half over the next four years would clash with the need to increase Medicare spending to keep medical coverage at the present level.

“I don’t expect Mr. Kerry or Mr. Bush to take it on in the next term. If they did, they would be doing their successors a huge favor,” Newhouse said.

Summers said that in addition to the issues the other panelists raised, the government would have to address an increase in industrial productivity that will ultimately mean fewer employees will be needed in manufacturing jobs.

The United States should also take advantage of its global societal dominance to confront issues such as income inequality, nuclear proliferation and global warming, Summers said.

He also said the United States needs to provide incentives to capable citizens to protect the country against terrorist attacks.

“We need as a society to make changes in public careers that are necessary to attract extraordinary people to careers, both permanent and temporary, in government,” Summers said.

—Staff writer Alan J. Tabak can be reached at tabak@fas.harvard.edu.