This paper asserts that the perspective of "A Nation at Risk" has distorted the nation's understanding of the relationship between education and the economy for two decades. Written during a recession, it implied that the state of the economy could be directly traced to the current performance of the nation's education system. However, this perspective does not distinguish between short-term swings in the business cycle and long-term trends in economic growth. The U.S. economy's ability to grow over time is partly a function of the quality of the educational system. In the past century, the U.S. led the world in expansion of its education system, contributing to its preeminence in the international economy. However, there is little evidence that the K-12 education system can be counted on to fuel economic growth in the future, because quality of schooling has become more important than just quantity or the year of schooling of U.S. students. Basic math and science skills appear especially important, but U.S. students are not competitive internationally. Other factors, such as the nation's superb colleges and universities, high immigration levels, and a well-functioning market economy have compensated for the state of the schools so far, but the economy could do even better over time if schools were improved. The costs of not improving U.S. schools are estimated to be large. (Contains 40 references and 5 figures.) (SM)