In a week-long series, prominent thinkers will look at ways to harness the private sector or extract more from a recalcitrant public sector in order to combat poverty and inequality. In the first post, Roosevelt Institute Fellow Georgia Levenson Keohane reminds us that while the government should be tackling these problems, there are practical and potentially exciting ways to get things done without it.
If there is any silver lining to the debt ceiling fiasco, it is that it has reshaped the contours of our national debate. No longer are we simply concerned with fiscal, economic or credit rating calamity; the crisis has gone existential.
Facts, it turns out, are stubborn and occasionally inconvenient. A budget deal that shreds the fabric of our social contract cannot ignore the following: that the recession has severely exacerbated poverty in the U.S.; child poverty remains shamefully high; inequality soldiers on; record and persistent unemployment -- either by official or more sobering measures -- has made life for millions of Americans scrambling to stay out of poverty cruelly hard and stressful. And all this before an unprecedented round of cuts to basic programs and services that comprise our safety net that will worsen, rather than improve, matters. The best route out of this mess, to say nothing of long-term prosperity, is jobs. Full stop.
On the question of employment, one does not need to be a student of history, Keynes, or a host of recent examples to face up to reality. Just take a look at the current British experiment in slash and burn austerity, the successes of the U.S. stimulus package (and in particular the tax credits, food stamps, unemployment insurance, and other social welfare provisions) that kept poverty from getting a whole lot worse, the basics of cost benefit (investments in things like early childhood education or healthcare for everyone, and for poor people especially, yield positive returns) or the basic levers of public policy (budgets have two sides, expenses and revenues). Job creation will require government spending. Full stop number two.
When it comes to fighting poverty, it is critical that we continue to wage these ideological and political battles. Yet at the same time, we must also embrace a pragmatic approach to policy formulation that recognizes the harsh realities of austerity: government sorely lacks the resources -- cash and political will -- to meet the surge in human needs. In the coming days, a series of posts will address issues of poverty and equality of opportunity in exactly these terms, illustrating important 'social innovations' that allow us to do more with less. Broadly speaking, we will hear about two kinds of approaches: initiatives that enable us to do a better job with the government funds we already have, and those that help attract new sources of capital to bear on social problems. Topics will include recent efforts to improve measurement and evaluation of critical social services, new programs designed to help poor people access benefits for which they are already eligible, experiments in designing 'social finance' instruments that aim to monetize the value of raising people out of poverty, and others. These are collaborations between non-profit organizations and their allies in local, state and the federal government to harness new sources of philanthropic or other private investment in improving social welfare.
The progressive project would be wise to remember that these social innovations are in no way a capitulation to our current and fractured tail-wagging-the-dog politics. Rather, they represent a forward looking recognition that economic recovery and sustained, shared prosperity will require practical, cross-sector and creative solutions to our most pressing problems.
Georgia Levenson Keohane is a Fellow at the Roosevelt Institute.