Economic Growth: The Latest From New America

How Much Does the Federal Government Spend To Promote Economic Mobility, And For Whom?

Fiscal Policy — Thu, 17 Apr 2008 09:30:00 -0400

In an economically mobile market economy, individuals and families are able to raise their private incomes, wealth, and ability (sometimes referred to as human capital) over time and across generations. In the United States, many associate economic mobility with the pursuit of the American Dream. Education, work experience, and saving enhance the opportunity for upward economic mobility. To this end, many federal spending and tax expenditure or tax subsidy programs aim to enhance economic mobility. But exactly how much does the federal government encourage economic mobility? What form does this encouragement take? And who benefits from these efforts?

To begin answering these… more

Taking Back Our Fiscal Future

Fiscal Policy — Fri, 04 Apr 2008 01:57:00 -0400

The authors of this paper are longtime federal budget and policy experts who have been drawn together by a deep concern about the nation’s long-term fiscal outlook. Our group covers the ideological spectrum. We are affiliated with a diverse set of organizations. We have been meeting informally for over a year, under the auspices of The Brookings Institution and The Heritage Foundation, to define the dimensions and consequences of the looming federal budget problem, examine alternative solutions, and reach agreement on what should be done. Despite our diverse philosophies and political leanings, we have found solid common ground. We… more

Rethinking Social Insurance

Fiscal Policy — Tue, 19 Feb 2008 00:00:00 -0500

The single greatest threat to the fiscal health of the United States is the runaway growth of the nation’s major retirement and health care entitlement programs. Social Security and Medicare are projected to grow from 7.5 percent of GDP today to almost 13 percent of GDP by 2030. Already, the two programs consume over a third of the federal budget. The total present value of costs that will exceed earmarked revenues of Social Security and Medicare over the next 75 years is $41 trillion, or, as the Government Accountability Office points out, a debt burden of $135,000 for every man, woman, and child in America. If… more

Do Sovereign Wealth Funds Make the U.S. Economy Stronger or Pose National Security Risks?

Economic Growth — Wed, 13 Feb 2008 18:00:00 -0500

By way of introduction, I spent most of the last seventeen years working as an investment banker and private equity investor based primarily in London, England. This experience, I believe, gives me a somewhat different perspective on Sovereign Wealth Funds and the role that they play in today’s international capital markets. Currently, I co-direct the Global Strategic Finance Initiative at the New America Foundation. The New America Foundation is a non-profit, post-partisan public policy institute in Washington D.C.

Over the past several months, few issues in international finance have generated as much discussion and comment as have Sovereign Wealth Funds. I commend you and your colleagues for the informed and balanced views… more

As the Stimulus Negotiations Continue...

Fiscal Policy — Mon, 04 Feb 2008 10:10:00 -0500

While we believe that fiscal stimulus done right would be likely to help the economy, we also believe that a good stimulus package is hard to come by. We have expressed concern that fiscal stimulus might come too late to help the stalling economy and that a package might be loaded up with costly and unrelated items.

Initially, we were gratified as negotiations between the White House and the House of Representatives led to what we found to be a well-crafted, reasonable package including temporary targeted rebates and an expanded business deduction. However, we are concerned that as the process… more

Fiscal Stimulus: Do It Right or Don't Do It At All

Fiscal Policy — Tue, 22 Jan 2008 15:42:00 -0500

Congress appears poised to move forward with a fiscal stimulus package. In theory, a mixture of monetary and fiscal policy is generally most appropriate to help a slowing economy; in practice however, fiscal policy becomes politicized so easily that it is often ineffective, and is sometimes even counterproductive. Too often in the past, stimulus bills have been poorly timed, poorly targeted, and larded up with unrelated items. If Congress moves forward with a stimulus package, the Committee for Responsible Federal Budget believes that stimulus should be...

For the full text of this CRFB statement, please see the PDF attached below.

Back to Basics: A Pro-Growth Public Investment Strategy

Economic Growth — Thu, 29 Nov 2007 16:32:00 -0500

For more than a decade, rising asset prices have driven the economy, benefiting the wealthy but doing relatively little to improve either the economic status of the majority of Americans or the country’s overall competitiveness. Rising stock and housing prices created staggering short-term increases in wealth for some, but did little to bolster the nation’s preeminence in technology, industry, or agriculture.

In order to retool the economy and generate balanced, robust job growth, the government should focus on rebuilding and enhancing the nation’s energy, transportation, and communications infrastructure. Judicious investment in renewing and creating critical public goods… more

The Macroeconomic Considerations of a Public Investment Strategy

Economic Growth — Thu, 08 Nov 2007 18:26:00 -0500

When you arrive at Shanghai’s Pudong International Airport, now about a decade old, you find yourself at the terminus of the world’s fastest train, a magnetic levitation marvel designed in Germany that takes you downtown at speeds briefly touching 450 kilometers an hour. There is little vibration, not much noise. Only a monitor in the car and the landscape rushing past your window lets you know just how fast you are moving.

Similarly, at the Amsterdam, Paris, or Zurich international airports escalators just beyond customs take you directly to the train station where you can board the sleek Très… more

Foreign Investment and Sovereign Wealth Funds

Economic Growth — Wed, 03 Oct 2007 11:02:00 -0400

The amount of money now held by governments around the world both in reserves and through sovereign wealth funds (“SWFs”) represents the largest concentration of investment capital the world has ever known. Their sheer size and expected rate of growth raise important issues regarding both the origin of this wealth and how it is to be invested. The origin of these funds rests on two main factors: the global imbalances between debtor nations (like the U.S.) and surplus nations (like China), and the rise of state-owned commodity (oil) funds. As for their uses, these countries have built up sums… more

No Worker Left Behind

Workforce and Family — Fri, 15 Jun 2007 07:00:00 -0400

Why aren’t Republican presidential candidates talking more about job training?

Wherever they go on the campaign trail, candidates are asked about off-shoring, layoffs, and wages. Despite the strong U.S. economy and near full employment, middle class anxiety is real.

Hardly a day goes by that some Democratic candidate doesn’t speak about the struggles of the middle class family in the age of globalization.Democrats campaigned last November on responding to working family angst through a minimum wage increase. Republicans often respond that they would help at-risk workers through job skills, yet they lack specifics.

If they believe skills are the answer, it’s… more

A Capital Budget for Public Investment

adminn — Thu, 01 Feb 2007 01:05:00 -0500

Click here for a brief video discussion of this idea.

The federal budget needs to prioritize spending that will make our economy more productive in the future. Yet, over the last several decades, the portion of the federal budget going to current consumption has increased, while that devoted to public investment has declined. As a result, the federal government does not adequately fund either the physical infrastructure or knowledge capital upon which a more productive economy rests. We are underinvesting not only in traditional… more

Universal Risk Insurance

adminn — Mon, 29 Jan 2007 09:57:00 -0500

In recent decades there has been a massive transfer of economic risk from shared institutional arrangements, such as unemployment insurance and basic benefit coverage provided by employers, onto the fragile balance sheets of families. Yet public programs have largely failed to respond.

"Universal Insurance" is a new response to this growing problem. It would provide short-term, stop-loss protection to families whose income (after taxes and public benefits) suddenly decline by a fifth or more due to job loss or catastrophic health expenses. All but the richest families would be eligible, but the program would be most generous for low-income families.… more

Realizing America's Economic Potential

adminn — Mon, 30 Oct 2006 21:37:00 -0500

Over the past decade and half, two pivotal developments have come together to create the conditions for what could be a new golden era of faster economic growth and rising prosperity. One development involves the technological advancements and other changes associated with the new economy, which have substantially increased U.S. and world productivity growth. The bursting of the tech bubble in 2000 may have put an end to the hype surrounding the new economy. But it did not undo the three productivity-enhancing revolutions of the new economy -- the information technology revolution, the revolution in business and finance, and the… more

Rebuilding America's Productive Economy

adminn — Mon, 30 Oct 2006 18:04:00 -0500

From its inception as a nation, America's great advantage over its global rivals has stemmed largely from the successful development of its vast interior. The Heartland has been both the incubator of national identity and an outlet for the entrepreneurial energies of both immigrants and those living in dense urban areas.

The term "Heartland" is commonly used to describe the region west of the Mississippi River and east of the Rocky Mountains. This region constitutes the primary focus of this report, although we believe our policy prescriptions also apply to other parts of the country that are culturally… more

Honoring America's Entrepreneurial Culture

Workforce and Family — Wed, 10 May 2006 15:12:00 -0400

In his famous work on American democracy, Alexis de Tocqueville observed that "Boldness of enterprise is the foremost cause of [America's] rapid progress, its strength, and its greatness." This observation, made in the mid- 1830s, is one with which few of those who comment on economics and American commerce today would disagree. The "boldness of enterprise" that Tocqueville referred to is entrepreneurship, the process of innovation, which, under conditions of risk and uncertainty, results in the creation of a new venture. Economists such as Joseph Schumpeter have argued that entrepreneurs are essential to the success of markets. The new enterprises… more

Economic Growth Finally Having its Effect on Family Wages

Workforce and Family — Mon, 13 Feb 2006 00:00:00 -0500

This week, the White House submitted its annual Economic Report of the President to Congress. It was a positive forecast driven by continuing strong consumer spending, business investment and export growth. Despite high energy prices and Hurricane Katrina, the White House had a lot of good news to trumpet on the economy from four years of largely uninterrupted economic growth.

For the complete document, please see the attached PDF version.

Bipartisan Solutions to Work and Family Balance Challenges

Workforce and Family — Sun, 01 Jan 2006 12:00:00 -0500

America is the world's most entrepreneurial nation, giving tremendous opportunities to our own citizens andattracting business leaders from around the world wholocate in the United States to realize the benefits of our dynamic labor force. Yet as recent cover stories in Businessweek and Fortune magazines indicate, American workers increasingly feel stressed about trying to balance their work and family commitments, and value working arrangements that can help them find balance.

When Americans talk about "workplace flexibility," different ideas come to mind. Employees think about flexible jobs that allow them to be productive at work while allowing them time to meet their… more

Running Faster to Stay in Place

Workforce and Family — Thu, 30 Jun 2005 00:00:00 -0400

Trying to make sense of the steady stream of economic news can be frustrating. Is the economy getting better or worse? The news seems to change weekly and, depending on what is measured, can seem bleak or sunny. Wages are stagnant but productivity is up. The unemployment rate declines but so does labor force participation.

We can't even begin to understand how America is faring economically unless we first establish how its families are doing -- how much they're earning and how many hours they must work to earn this income.

We have set out here to examine the number… more

The Population Implosion

American Strategy — Sun, 01 Feb 2004 00:00:00 -0500

A NEW CHALLENGE FACES THE WORLD. It is not a problem that can be photographed, reduced to a sound bite, or rendered into the conventional formulations of Left and Right. It has everything to do with sex, death, money, and power, yet is rarely the subject of a headline. Rather, its reality dwells beneath the surface of everyday events, in the realm of what historian Arnold Toynbee once called the "deeper, slower movements that, in the end, make history." The trend, if properly managed, presents many positive opportunities for mankind, but also poses deep risks to… more

Sustainable Enterprise

Economic Growth — Fri, 28 Feb 2003 00:00:00 -0500

The fundamental challenge for human institutions in the 21st century is to create and maintain a sustainable combination of economic, social, and natural environmental conditions in an increasingly global and commercial civilization.

This challenge is not now being met. The world economy so far is failing to meet even the basic needs of a large fraction of the human population, or to protect its natural resources and the ecosystems that produce them, even as it creates unprecedented wealth and amenities for a few. The reasons for these failures lie in both economic and political institutions.

An emerging… more