What Is Economic Growth Without Shared Prosperity?

Apr 14, 2014Joelle Gamble

It's time for the U.S. to recognize that policies to push economic growth must focus on average Americans, not "job creators."

It's time for the U.S. to recognize that policies to push economic growth must focus on average Americans, not "job creators."

Rampant inequality is putting the future of the American economy in peril. The financial recovery we have experienced the past few years has only led to massive gains for top earners and little to no change for average Americans. Decades of policies that throw more benefits to the top have not “trickled down” to the average household.

But more importantly, our current idea of economic progress is skewed. The wealthy have created this idea that “job creators” are a class of people who can magically restore out economy, ignoring the fact that entrepreneurship and innovation come from all economic statuses.

America needs to shift our economic narrative away from a heavy emphasis on GDP-based growth and toward a model that promotes prosperity for everyone. We need to think about how we generate demand in order to create jobs. This demand comes from average Americans having the ability to engage meaningfully in the economy, with fair wages without discrimination in the workplace. In short: economic progress must involve prosperity for all Americans, not just “job creators.”

Legislative battles at the local, state, and federal levels around equal pay and the minimum wage will prove crucial to changing our conception of what constitutes good economic policy. Victories in these fights represent tangible ways in which the average American worker can better his or her own economic prospects and simultaneously grow the economy.

We are seeing progress now. In January, the city of Seattle began pushing to raise the minimum wage for city workers to $15.00 per hour. Earlier this week, the state of Maryland voted to raise its minimum wage from the federal $7.25 to $10.10 per hour. Meanwhile, President Obama continues his push for federal action.

Meanwhile, in the United States, women make an average of $0.77 for every $1.00 earned by men, but growing movements are pushing the needle in the right direction. The President signed directives to clamp down on gender discrimination by federal agencies and contractors. Americans show strong bipartisan support for paid sick leave and family leave. Municipalities, are pushing through bills to make this support a reality –in New York City, Mayor De Blasio has already expanded the paid sick leave law that was established in 2013.

While the most sustainable and sweeping changes on these fronts may be best achieved at the federal level, many of the real policy battles are playing out in cities and states. This presents a real opportunity to involve a wide swath of Americans in economic justice work in their neighborhoods. If organizers on the ground build power to push a prosperity-centric policy agenda forward through both community building and new technology platforms, we can see a real shift in the narrative of what economic progress looks like in this nation.

Joelle Gamble is the Roosevelt Institute | Campus Network National Field Strategist.

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Daily Digest - April 10: 15 Ways to Put America Back to Work

Apr 10, 2014Rachel Goldfarb

Click here to receive the Daily Digest via email.

America Can Attain Full Employment with a Bold Approach to the Jobs Emergency (Next New Deal)

Jeff Madrick, Director of the Bernard L. Schwartz Rediscovering Government Initiative, argues that government can create more and better jobs if lawmakers can get over their current fatalism.

Click here to receive the Daily Digest via email.

America Can Attain Full Employment with a Bold Approach to the Jobs Emergency (Next New Deal)

Jeff Madrick, Director of the Bernard L. Schwartz Rediscovering Government Initiative, argues that government can create more and better jobs if lawmakers can get over their current fatalism.

  • Roosevelt Take: Read the Rediscovering Government Initiative's new report, "A Bold Approach to the Jobs Emergency: 15 Ways We Can Create Good Jobs in America Today," here.

Obamacare: 9.3 million & Counting (The Big Picture)

Thom Hartmann speaks with Roosevelt Institute Senior Fellow Richard Kirsch, who looks forward to when the GOP gets past obstructionism and we can focus on ways to improve the Affordable Care Act.

Long-Term Unemployment Is Elevated Across All Education, Age, Occupation, Industry, Gender, And Racial And Ethnic Groups (Working Economics)

Heidi Shierholz argues that the prevalence of long-term unemployment across all demographics proves this crisis has nothing to do with workers, and everything to do with employers who aren't hiring due to lack of demand.

The Politics Around Welfare Show Why the Poor Need a Real Break, Not Just a Tax Break (The Nation)

Michelle Chen argues that the Earned Income Tax Credit shouldn't be the key pillar of anti-poverty efforts, as it's only a once-a-year boost that leaves out too many people living in poverty.

Forget Obamacare: Vermont Wants to Bring Single Payer to America (Vox)

Sarah Kliff explains that Vermont's governor is determined to see single payer health care in his state because it will cut statewide health care costs by millions. His current challenge: funding the program.

U.S. House Republicans Prepare a Second JOBS Act bill; Critics See Dangers (Reuters)

The bill is supposed to make it easier for startups to raise money, writes Sarah N. Lynch, but critics see it as an attempt at deregulation that reduces the amount of information potential investors can access.

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America Can Attain Full Employment with a Bold Approach to the Jobs Emergency

Apr 9, 2014Jeff Madrick

A new report from the Rediscovering Government Initiative lays out 15 ways the government can create more and better jobs starting right now.

A new report from the Rediscovering Government Initiative lays out 15 ways the government can create more and better jobs starting right now.

After five long years, the economy has at last produced enough new jobs to compensate for the 8 million lost in the Great Recession of 2009. But in that same period some 7 million more Americans reached employment age, and we have only produced about half the jobs we need to keep up with population growth. To make matters worse, the jobs created during the recovery pay on average much less than those lost. Yet rather than pulling out all the stops to create more and better jobs, too many politicians and economists tell us we can’t move too quickly. They cite limitation after limitation: inflation fears, budget deficits, skills mismatches, and so on. Americans deserve better than this defeatism. We deserve bold action.

In a new report, A Bold Approach to the Jobs Emergency, the Bernard L. Schwartz Rediscovering Government Initiative offers fifteen ideas that could get us back to true full employment and at the same time build a foundation for rapid economic growth in the future. We are demanding a full-court press to recreate the economic opportunity that America once offered. We emphasize some ideas that have been heard before, but many that are forced to the back seat or are hardly talked about at all.

There are taboos among policymakers that are holding us back. Above all, we must take fiscal stimulus seriously again. Today’s economy operates far below its growth potential. The fiscal stimulus we need should not only make the social safety net whole but also be tied to aggressive investment in transportation, communications, and clean technologies that have been badly neglected.

The federal government can itself create useful, good-paying jobs in transportation, teaching, and health care. A carefully crafted federal job creation program, as was successfully enacted under FDR, can work today. Fifty billion dollars worth of new jobs could go a long way toward helping Americans.

The repressive effect on jobs and wages that results from aggressive Wall Street practices is all but invisible in Washington. Academic economists are almost as bad as the Washington think tanks in paying too little attention to how big finance can undermine both jobs and wages. Our report highlights the findings of researchers such as Eileen Appelbaum, formerly of Rutgers, and Rosemary Batt of Cornell, who show that the leveraged buyout and privatization crazes have on average led to many lost jobs and significantly less spending on R&D. It also showcases the work of William Lazonick of the University of Massachusetts, Lowell, who has long called attention to how massive corporate stock buybacks may help shareholders in the short run but hurt the American economy by diverting investment.

Poor wages are also part and parcel of America’s economic failure. Today’s typical household earns no more after inflation than it did almost 20 years ago. Only 44 percent of Americans think they are middle class, the lowest level recorded. However, until fairly recently, raising the minimum wage has also been taboo. The bill before Congress to raise the federal minimum wage from $7.25 to $10.10 may still not pass, but intelligently designed studies suggest such a hike could lift not just 1 million, as the Congressional Budget Office has too conservatively estimated, but 6 million people out of poverty and provide raises for about 25 million people. Similarly, we need an expansion of the Earned Income Tax Credit to childless adults, which the president supports.

Most tragically, we neglect our young. Six million or so Americans ages 16 to 24 are neither in school nor have a job. Dozens of local agencies have been created to place these “opportunity youth” on a middle-class track. But they badly need to be scaled up, and federal support is the only way to do so.

The new interest in funding pre-kindergarten in New York City and elsewhere is welcome. But help has to come much earlier in the lives of children in poverty. One in every five America children under the age of six live in poverty, the second-highest rate in the rich world. A growing body of research shows unambiguously how poor children are cognitively and emotional deprived—and how bleak their futures inevitably are. In America more than in any other rich country, inequality begins at birth. We need to address this crisis to begin building the economy of the future.

If America wants a strong future, it had also better invest more in technological research. Government research has been the heart of the innovation economy, as economists have increasingly shown. But Congress mindlessly cut such research last year. It must be revived and expanded. Other recommendations in our report include investments in energy, national paid family leave policies, and re-vamped workforce training.

The decline of work is not inevitable, and there are more ideas than the 15 we present in our report. We calculate that we can get the unemployment rate below 5 percent and raise wages with a combination of such programs, without incurring a dangerously growing budget deficit.

But bankrupt ideology, narrow politics, and bad economics are robbing the nation of its confidence and hope for the future. A comprehensive jobs plan is not even being attempted in America. Failure becomes contagious. Let’s end the fatalism about employment in America now and win back the nation’s hard-won optimism. 

Jeff Madrick is the Director of the Bernard L. Schwartz Rediscovering Government Initiative.

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Stiglitz: Why Inequality Matters and What Can Be Done About It

Apr 1, 2014Joseph Stiglitz

Roosevelt Institute Senior Fellow and Chief Economist Joseph Stiglitz will speak before the Senate Budget Committee today on the topic of "Opportunity, Mobility, and Inequality in Today's Economy." His prepared remarks are below. Click here to download all of the statements from the hearing.

Roosevelt Institute Senior Fellow and Chief Economist Joseph Stiglitz will speak before the Senate Budget Committee today on the topic of "Opportunity, Mobility, and Inequality in Today's Economy." His prepared remarks are below. Click here to download all of the statements from the hearing.

It is a great pleasure for me to discuss with you one of the critical issues facing our country, its growing inequality, the effect it is having on our economy, and the policies that we might undertake to alleviate it. America has achieved the distinction of becoming the country with the highest level of income inequality among the advanced countries. While there is no single number that can depict all aspects of society’s inequality, matters have become worse in every dimension: more money goes to the top (more than a fifth of all income goes to the top 1%), more people are in poverty at the bottom, and the middle class—long the core strength of our society—has seen its income stagnate. Median household income, adjusted for inflation, today is lower than it was in 1989, a quarter century ago.[1] An economy in which most citizens see no progress, year after year, is an economy that is failing to perform in the way it should. Indeed, there is a vicious circle: our high inequality is one of the major contributing factors to our weak economy and our low growth.

As disturbing as the data on the growing inequality in income are, those that describe the other dimensions of America’s inequality are even worse: inequalities in wealth are even greater than income, and there are marked inequalities in health, reflected in differences, for instance, in life expectancy. But perhaps the most invidious aspect of US inequality is the inequality of opportunity. America has become the advanced country not only with the highest level of inequality, but is among those with the least equality of opportunity—the statistics show that the American dream is a myth; that the life prospects of a young American are more dependent on the income and education of his parents than in other developed countries. We have betrayed one of our most fundamental values. And the result is that we are wasting our most valuable resource, our human resources: millions of those at the bottom are not able to live up to their potential.

This morning, I want to make eight observations concerning this inequality. The first is that this inequality is largely a result of policies—of what we do and don’t do. The laws of economics are universal: the fact that in some countries there is so much less inequality and so much more equality of opportunity, the fact that in some countries inequality is not increasing—it is actually decreasing—is not because they have different laws of economics. Every aspect of our economic, legal, and social frameworks helps shape our inequality: from our education system and how we finance it, to our health system, to our tax laws, to our laws governing bankruptcy, corporate governance, the functioning of our financial system, to our anti-trust laws. In virtually every domain, we have made decisions that help enrich the top at the expense of the rest.

The second observation is that much of the inequality at the top can’t be justified as “just deserts” for the large contributions that these individuals have made. If we look at those at the top, they are not those who have made the major innovations that have transformed our economy and society; they are not the discoverers of DNA, the laser, the transistor; not the brilliant individuals who made the discoveries without which we would not have had the modern computer. Disproportionately, they are those who have excelled in rent seeking, in wealth appropriation, in figuring out how to get a larger share of the nation’s pie, rather than enhancing the size of that pie. (Such rent seeking activity typically actually results in the size of the economic pie shrinking from what it otherwise would be.) Among the most notable of these are, of course, those in the financial sector, who made their wealth by market manipulation, by engaging in abusive credit card practices, predatory lending, moving money from the bottom and middle of the income pyramid to the top. So too, a monopolist makes his money by contracting output from what it otherwise would be, not by expanding it.

Thirdly, the idea that one shouldn’t worry about inequality because everyone will benefit as money trickles down, has been thoroughly discredited. In some ways, I wish it were true, for if it were, it would mean that the average American would be doing very well today, because we have thrown so much money at the top. But the statistics I gave a few minutes ago shows that it is not true: while the top has been doing very well, the rest has been stagnating.

Fourthly, this recession—while in no small measure caused by the financial sector which itself is responsible for so much of our inequality today—has in turn made inequality so much worse. 95% of the gains since the so-called recovery have gone to the top 1%.

Fifth, it is not the case that our economy needs this inequality to continue to grow. One of the popular misconceptions is that those at the top are the job creators; and giving more money to them will thus create more jobs. America is full of creative entrepreneurial people throughout the income distribution. What creates jobs is demand: when there is demand, America’s firms (especially if we can get our financial system to work in the way it should, providing credit to small and medium-sized enterprises) will create the jobs to satisfy that demand. And unfortunately, given our distorted tax system, for too many at the top, there are incentives to destroy jobs by moving them abroad. This growing inequality is in fact weakening demand—one of the reasons that inequality is bad for economic performance.

Sixth, we pay a high price for this inequality, in terms of our democracy and nature of our society. A divided society is different—it doesn't function as well. Our democracy is undermined, as economic inequality inevitably translates into political inequality. I describe in my book how the outcomes of America’s politics are increasingly better described as the result of a system not of one person one vote but of one dollar one vote. One of the prices we pay for the extremes to which inequality has grown and the nature of inequality in America—both inequality in outcomes and inequalities of opportunities—is that we have a weaker economy. Greater inequality leads to lower growth and more instability. These ideas now have become mainstream: even the IMF has embraced them. We used to think of there being a trade-off: we could achieve more equality, but only at the expense of giving up on overall economic performance. Now we realize that, especially given the extremes of inequality achieved in the US and the manner in which it is generated, greater equality and improved economic performance are complements.

This is especially true if we focus on appropriate measures of growth, focusing not on what is happening on average, or to those at the top, but how the economy is performing for the typical American, reflected for instance in median income. For too many—perhaps even a majority—the American economy has not been delivering. And if our economy is not delivering, it not only hurts our people, it undermines our position of leadership in the world: will other countries want to emulate an economic system in which most individuals’ incomes are simply stagnating?

We pay a price not only in terms of a weak economy today, but lower growth in the future. With nearly one in four American children growing up in poverty,[2] many of whom face a lack of access to adequate nutrition and education, the country’s long-term prospects are being put into jeopardy.

The seventh observation is that the weaknesses in our economy have important budgetary implications. The budget deficits of recent years are a result of our weak economy, not the other way around. If we had more robust growth, our budgetary situation would be far improved. That’s why investments in decreasing inequality and increasing equality of opportunity make sense not only for our economy, but for our budget. When we invest in our children, the asset side of our country’s balance sheet goes up, even more than the liability set: any business would see that its net worth is increased. In the long run, even looking narrowly on the liability side of the balance sheet, it will be improved, as these young people earn higher incomes and contribute more to the tax base.

The final observation I want to make is that the role of policy in creating inequality means there is a glimmer of hope. Policy created the problem, and it can help get us out of it. There are policies that could reduce the extremes of inequality and increase opportunity—enabling our country to live up to the values to which it aspires. There is no magic bullet, but there are a host of policies that would make a difference. In the last chapter of my book, The Price of Inequality, I outline 21 such policies, affecting both the distribution of income before taxes and transfers and after. We need to move more people out of poverty, strengthen the middle class, and curb the excesses at the top. Most of the policies are familiar: more support for education, including pre-school; increasing the minimum wage; strengthening the earned-income tax credit; giving more voice to workers in the workplace, including through unions; more effective enforcement of anti-discrimination laws; better corporate governance, to curb the abuses of CEO pay; better financial sector regulations, to curb not just market manipulation and excessive speculative activity, but also predatory lending and abusive credit card practices; better anti-trust laws, and better enforcement of the laws we have; and a fairer tax system—one that does not reward speculators or those that take advantage of off-shore tax havens with tax rates lower than honest Americans who work for a living. If we are to avoid the creation of a new plutocracy in the country, we have to retain a good system of inheritance and estate taxation, and ensure that it is effectively enforced. We need to make sure that everyone who has the potential to go to college can do so, no matter what the income of his parents—and to do so without undertaking crushing loans. We stand out among advanced countries not only in our level of inequality, but also on how we treat student loans in our bankruptcy loans. A rich person borrowing to buy a yacht can get a fresh start, and have his loans forgiven; not so for a poor student striving to get ahead. The special provisions for capital gains and dividends not only distort the economy, but, with the vast majority of the benefits going to the very top, increase inequality—at the same time that they impose enormous budgetary costs: $2 trillion dollars over the next ten years, according to the CBO.[3] While the elimination of the special provisions for capital gains and dividends is the most obvious reform in the tax code that would improve inequality and raise substantial amounts of revenues, there are many others that I discuss in the attached paper which I would like to submit for the record.

A final point is that we must be careful of how we measure our progress. If we use the wrong metrics, we will strive for the wrong things. Economic growth as measured by GDP is not enough—there is a growing global consensus that GDP does not provide a good measure of overall economic performance. What matters is whether growth is sustainable, and whether most citizens see their living standards rising year after year. This is the central message of the International Commission on the Measurement of Economic Performance and Social Progress, which I chaired. Since the beginning of the new millennium, our economy has clearly not been performing in either of these dimensions. But the problems in our economy have been manifest for longer. As I have emphasized, a key factor underlying America’s economic problems today is its growing inequality and the low level of opportunity.

In the past, when our country reached these extremes of inequality, at the end of the 19th century, in the gilded age, or in the Roaring 20s, it pulled back from the brink. It enacted policies and programs that provided hope that the American dream could return to being a reality.

We are now at one of these pivotal points in history. I hope we once again will make the right decisions. You and your committee, in the budget decisions that you will be making, play a vital role in setting the country in the right direction.

[1] For large segments of the American population, matters are even worse. The inflation adjusted median income of a male worker with only a high school degree has fallen by 47% from 1969 to 2009. For additional data sources and explanation of these trends, see my “Reforming Taxation to Promote Growth and Equity,” forthcoming as a Roosevelt institute working paper, which is submitted along with this written testimony. Inequality is discussed in even greater detail in my 2012 book, The Price of Inequality: How Today’s Divided Society Endangers Our Future, New York: W.W. Norton.

[3] See Congressional Budget Office, 2013, The Distribution of Major Tax Expenditures in the Individual Income Tax System, May, p.31, available at http://cbo.gov/sites/default/files/cbofiles/attachments/TaxExpenditures_One-Column.pdf (accessed March 28, 2014). This figure includes the effects of the “step-up of basis at death” provision, which reduces the taxes that heirs pay on capital gains. Not including this provision, the ten-year budgetary cost of preferential treatment for capital gains and dividends is $1.34 trillion. 

Joseph Stiglitz is a Senior Fellow and Chief Economist for the Roosevelt Institute. He is a Nobel laureate in economics and University Professor at Columbia University.

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Daily Digest - March 24: Public Financing: Compromise Won't Fix Corruption

Mar 24, 2014Rachel Goldfarb

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A Promise Cuomo Can Keep (Albany Times Union)

Roosevelt Institute Senior Fellow Jonathan Soros and Frederick A.O. Schwartz call on New York's Governor Cuomo to avoid compromise on public campaign financing where concessions just extend a corrupt status quo.

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A Promise Cuomo Can Keep (Albany Times Union)

Roosevelt Institute Senior Fellow Jonathan Soros and Frederick A.O. Schwartz call on New York's Governor Cuomo to avoid compromise on public campaign financing where concessions just extend a corrupt status quo.

The Tea Party and Wall Street Might Not Be Best Friends Forever, But They Are for Now (TNR)

Tea Party Republicans in Congress insist that the financial crisis was all government's fault, says Roosevelt Institute Fellow Mike Konczal. That narrative, and the corresponding legislative agenda, couldn't make Wall Street happier.

Why Charity Can’t Replace the Safety Net (Slate)

Jordan Weissmann praises Mike Konczal's recent piece in Democracy Journal, emphasizing that charity can't replace government aid during recessions. Charitable donations drop just when need rises.

All Economics Is Local (NYT)

Raising the local minimum wage is an effective step towards reducing inequality, say Michael Reich and Ken Jacobs. Moreover, their research shows that low-income industries can absorb the increase and benefit from greater employee retention. 

Payday Lending: The Loans with 350% Interest and a Grip on America (The Guardian)

David Dayen explains the vast regulatory conundrum of these predatory loans. He lays out how state and national regulators, Congress, and the Justice Department are working side-by-side, but often a step behind lenders.

The End of Jobs? (In These Times)

Sarah Jaffe argues that under our current system, the shrinking of secure full-time work increases inequality. Instead, we could restructure our economy to push for a universal basic income and shorter working hours.

New on Next New Deal

Memo to Congress: Family Planning Needs More Funding

In her remarks at a Congressional briefing last week, Roosevelt Institute Fellow Andrea Flynn explains why publicly funded family planning needs to expand as the Affordable Care Act is implemented. 

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The Progressive Budget Reminds Us That Government Can Create Jobs

Mar 17, 2014Nell Abernathy

Unemployment is still a major problem in the U.S., and the best solutions involve a more aggressive government response.

Unemployment is still a major problem in the U.S., and the best solutions involve a more aggressive government response.

The Congressional Progressive Caucus budget, released last Wednesday, is forecast to create more than 8 million jobs by 2017 – a claim that is bound to stir up an argument about the government’s role in job creation. It’s not a new argument – progressives and conservatives have been having it explicitly since 2008 and more implicitly for years before that – but it is worth revisiting, because progressives are losing, and it’s a battle we cannot afford to surrender.

First, some might wonder if we even need to worry about jobs anymore. Unemployment is falling, GDP has expanded, and the stock market has rallied. The political debate has shifted away from a focus on growth and toward the consequences of our failure to stimulate growth: rising inequality and poverty. But in the face of federal paralysis, the labor participation rate remains down, wages remain stagnant, and productivity continues to decline. Now more than ever, the government must restore the dream of dignified work to all Americans.

Even if we agree that there is a problem, the skeptics will argue that the government is too inefficient and bureaucratic to effectively create middle class jobs and support economic growth. But the 2009 stimulus package provides a prime example of effective government intervention. Economists of all stripes, including Alan Blinder, former vice chair of the Federal Reserve, and Mark Zandi, Chief Economist at Moody’s and former Economic Advisor to John McCain, agree that the ARRA succeeded in creating the 2-3 million jobs it was designed to create. In their analysis, Zandi and Blinder found that without the stimulus, the economy would have contracted 6 percent and unemployment would have hit 11.6 percent. Instead, at its worst, GDP declined 2 percent and unemployment hit 10 percent.

The problem was that the ARRA could not protect the U.S. from a shock that cost the economy 12 million jobs, because the $825 billion package was too small and tapered too soon to plug the $1.2 trillion drop in private demand.

Acknowledging the success of the stimulus, some conservative analysts argue the challenges we now must tackle are not remnants of the recession, which would be amenable to government intervention, but rather are the product of insurmountable structural trends – automation, globalization, financialization. But even if that is true, it’s not an excuse for the U.S. government to abdicate its role as a driver of economic growth. Indeed, a changing economic landscape requires an adaptive government to ease the transition. Increased automation requires reformed and renewed investment in human capital to allow American workers to dominate the information age. Globalized supply chains demand new labor laws to recognize the rise of sub-contracted work. A growing financial sector requires an enhanced regulatory regime to ensure capital is allocated toward productive uses.

Then we have the deficit scolds, who are likely to claim that the CPC’s proposals are fiscally unfeasible. While hysteria about the government debt has prevented lawmakers from passing an additional large-scale stimulus package, new U.S. debt projections, and the clear failure of Europe’s austerity measures, prove these threats to be overblown. The danger associated with deficits, rising interest rates, and run-away inflation are far from a reality in the current climate of below-target inflation and non-existent interest rates.

In fact, the U.S. budget deficit fell to 4 percent of GDP in 2013, according to the CBI, and was projected to decline to 3 percent, the average for the last 40 years, in 2014. At about 73 percent of GDP, the federal debt remains high; however, the most effective way to reduce the debt to GDP ratio is to grow GDP, not shrink debt. National debt topped 118 percent of GDP immediately following World War II, and then the debt doubled over the next 30 years. But because the economy grew rapidly, debt fell to a healthy 30 percent of GDP by 1981. Europe’s experience with austerity reveals the danger of valuing debt-reduction above growth. As spending reductions slowed rising debt, they also cut GDP and increased the relative cost of debt payments.

The CPC’s budget will create new jobs, improve job quality, and invest in future job growth. The ideas are not new; many, like investment in infrastructure and workforce training, have been proposed in bills currently sitting in Congress. Nor are they necessarily bold; for example, funding R&D and using fiscal stimulus were considered common-sense government policies in previous generations. The problem up to this point has not been a lack of good ideas. It’s lack of political will. Let’s reopen this debate and use the vast number of policy tools we know to be effective.

Nell Abernathy is the Program Manager for the Roosevelt Institute's Bernard L. Schwartz Rediscovering Government Initiative.

Image via Thinkstock

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Daily Digest - March 17: The Pacific Standard for Bad Deals

Mar 17, 2014Rachel Goldfarb

Click here to receive the Daily Digest via email.

On the Wrong Side of Globalization (NYT)

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On the Wrong Side of Globalization (NYT)

Roosevelt Institute Senior Fellow and Chief Economist Joseph Stiglitz argues that trade deals like the proposed Trans-Pacific Partnership create a race to the bottom for regulations, and exacerbate inequality.

The Great Corporate Cash-Hoarding Crisis (AJAM)

David Cay Johnston says that multinationals keeping their cash abroad instead of investing in their businesses or paying income taxes on it is what is keeping the U.S. from a real economic recovery.

10 Things Elizabeth Warren's Consumer Protection Agency Has Done for You (MoJo)

Erika Eichelberger lists the changes the Consumer Financial Protection Bureau has already pushed through since its creation in 2011, which affect homeowners, student loan holders, and anyone with a credit card.

Capping Public Service Loan Forgiveness at $57.5K Defeats Its Purpose (HuffPo)

People who use the PSLF program are trying to do good for the country, and according to Tim Lowden, this proposed cap would create a disincentive to entering these absolutely vital careers.

Income Gap, Meet the Longevity Gap (NYT)

Two U.S. counties, separated by only 350 miles, have life expectancies that differ as much as Sweden and Iraq. Annie Lowrey reports on how inequality is affecting the length of people's lives.

Paul Ryan’s Worst Nightmare: Here’s the Real Way to Cut Poverty in America (Salon)

Michael Lind thinks planning to avert future poverty is great, but we could reduce poverty today with a simple solution: increased government spending in the form of generous welfare and social insurance programs.

The Cost of Kale: How Foodie Trends Can Hurt Low-Income Families (Bitch Magazine)

Flat wages and rising food costs are only exasperated by food gentrification and trends, says Soleil Ho. From 2007 to 2012, wages remained stagnant, while the cost of feeding a family increased 18 percent.

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Daily Digest - February 7: Why America Keeps Falling Behind

Feb 7, 2014Rachel Goldfarb

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When It Comes To High-Speed Internet, U.S. 'Falling Way Behind' (Fresh Air)

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When It Comes To High-Speed Internet, U.S. 'Falling Way Behind' (Fresh Air)

Dave Davies interviews Roosevelt Institute Fellow Susan Crawford, who discusses why net neutrality is so important and how the FCC can preserve it. They also talk about the Internet infrastructure in the U.S., which needs improvements to compete globally.

Cities at Work: Progressive Local Policies to Rebuild the Middle Class (CAP)

Joel Rogers and Satya Rhodes-Conway introduce their new report on why local governments are best suited to strengthen the middle class. They point to cities' wealth, sustainability, and democratic values and organization as key reasons.

  • Roosevelt Take: Roosevelt Institute Associate Director of Networked Initiatives Alan Smith discusses the Roosevelt Institute | Campus Network's "Rethinking Communities" initiative, which is similarly focused on local economic development.

Skating Close to the Edge, Again, on the Debt Ceiling (NYT)

Annie Lowrey writes about global fatigue over the U.S. debt ceiling stand-offs, with everyone from Democrats in Congress to international financial managers expressing exhaustion with the tactic. She says the damage to the country's financial reputation is done, no matter the outcome this time.

Obamacare Cures 'Job Lock' (USA Today)

Theda Skocpol and Katherine Swartz praise the end of 'job lock,' when workers are reluctant to leave jobs because they need the employer-sponsored health insurance. Freeing those workers is going to encourage innovation and entrepreneurship.

Senate Still at Odds Over Whether to Extend Unemployment Benefits for Long-Term Jobless (WaPo)

Paul Kane reports that Senate Democrats again failed to pass an extension of long-term unemployment benefits, falling just one vote shy of the supermajority needed to break a filibuster. Of course, he notes, House Republicans have shown no interest in taking up this issue anyway.

The Shame of America's Long-Term Unemployment Crisis (The Atlantic)

Derek Thompson says that Washington is failing on long-term unemployment, which is a serious crisis for the U.S. job market. There could be ways to incentivize hiring the long-term unemployed, but that would require the GOP to care about this problem.

New on Next New Deal

A CBO Report Shows How Obamacare Will Help the Working Poor

Roosevelt Institute Senior Fellow and Director of the Bernard L. Schwartz Rediscovering Government Initiative Jeff Madrick writes that the money that low-income families won't have to spend on health insurance, thanks to Medicaid expansion and insurance subsidies, will boost the economy when it's spent elsewhere.

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Mike Konczal on What's Next for Financial Reform

Feb 6, 2014

In a new episode of the Roosevelt Institute's video explainer series, "What's the Deal," Roosevelt Institute Fellow Mike Konczal talks about what the Dodd-Fran

In a new episode of the Roosevelt Institute's video explainer series, "What's the Deal," Roosevelt Institute Fellow Mike Konczal talks about what the Dodd-Frank financial reform law accomplished, what still needs to be done to change the system, and why there are reasons for reformers to be optimistic.

For more, check out An Unfinished Mission: Making Wall Street Work for Us, a report co-edited by Konczal.

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Daily Digest - January 22: Which Schools Will Make the Grade on Economic Impact?

Jan 22, 2014Rachel Goldfarb

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Students to Analyze Yale’s Impact on New Haven (Yale Daily News)

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Juan Carlos Suárez Serrato and Owen Zidar write that cutting or eliminating a state's corporate income taxes won't bring in new business, and will help shareholders rather than average workers. They call for increased infrastructure spending as a better method of attracting businesses.

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John Nichols reports on the growing movement to support a constitutional amendment that would declare money to be property rather than speech and reverse the Citizens United decision. Sixteen states have already passed resolutions supporting the proposed amendment.

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