Prominent investor David Rubenstein, who co-founded private equity firm The Carlyle Group, discussed how the U.S. should respond to the world's emerging markets in a talk at the Washington Ideas Forum in Washington, D.C. He cited reports that China's economy in particular will surpass America's in 2035. "We have to recognize as Americans that we're not going to be as dominant a force in the global economy as we have been," he said. "China is not all that different than some other emerging markets."

Rubenstein warned that, if the U.S. failed to prepare for the rise of China and other emerging markets, "our children are going to have and our grandchildren are going to have" a lower quality of life and a less affluent lifestyle than we enjoy today. He said the U.S. could prepare by fixing three problems: the national debt, unemployment, and income disparity. "Unless we solve some of these problems, the emerging markets are going to dominate the world's economy."

A policy official in the Carter administration as a young man, Rubenstein took a distinctly bipartisan stand on the nation's greatest economic problems. While both parties agree that unemployment is among the country's biggest problems today, Republicans have typically emphasized the immediate need to reduce the national debt, while Democrats have focused on the growing income disparity. "The income disparity is worse today than its ever been," he said. "It's never been that high in history."

When asked how to fix the widening income gap, Rubenstein said that while he supports raising taxes, that will not fix the problem. He said the primary way to narrow the income gap is by addressing the quality of education for student in kindergarten through high school. "We aren't producing enough people right now who are going to be well educated citizens," he warned, noting the irony that the U.S. has the world's best college system but rapidly declining national standard for public education at all levels below college.