economy

Reelected to a second term, President Barack Obama is speaking with new force and clarity about the threat of climate change; and he is encouraging the Environmental Protection Agency to take bold steps to reduce dangerous greenhouse gas emissions. To make up for Congressional unwillingness to legislate, the Obama administration seems ready to do all it can through executive actions. Many professional environmentalists are delighted, and will rely on inside-the-beltway lobbying to urge regulators onward. That is fine for the short run, but it would be too bad if efforts to counter damage from global warming stopped at insider advocacy.

The new few years are exactly the right time to build a broad nationwide network of popularly rooted organizations committed to supporting carbon-capping as part of America’s transition to a green economy. To be prepared when the next opening arises in Congress, organizational efforts must reach far beyond the Beltway – to knit together alliances and inspire tens of millions of ordinary Americans to push for change. more...

“The only thing we have to fear is fear itself,” said incoming President Franklin Delano Roosevelt, as he pledged in March 1933 to lead the U.S. federal government in “action—and action now” to meet crises of global upheaval and economic collapse. Subsequent New Deal reforms have been lionized by analysts. But what were the pervasive fears to which Roosevelt pointed, the fears that shaped and informed transformations in U.S. policy and politics in the mid-twentieth century?

Just before his death in 2007, Arthur Schlesinger, Jr., noted that his magisterial Age of Roosevelt had been “conditioned by the passions of my era” and observed that “when new urgencies arise in our own times and lives, the historian’s spotlight shifts, probing …into the shadows, throwing into sharp relief things that were always there but that earlier historians had carelessly excised from collective memory.” Taking this insight to heart, my new book Fear Itself reexamines the New Deal from a perspective informed by the urgencies of the early twenty-first century—with its economic volatility, global religious zealotry, and military insecurity.  more...

Do Americans care that income gaps between the rich and everyone else are growing by leaps and bounds? When citizens do care, what do they want done about it? Across the political spectrum, debates about these questions have raged with new force since the Occupy Wall Street movement took to the streets in 2011 and the 2012 elections highlighted the issue. To read daily coverage, though, is to hear little more than superficial or partisan assertions. We can do better by tracking public attitudes over many years, which show us both that Americans care about inequality and are very much aware of its negative consequences for all but a sliver at the top. more...

In his 2011 State of the Union Address, President Obama invoked “our Sputnik moment.” Recalling U.S. investments in research and education after Russia launched the first space satellite half a century ago, the President called for renewed efforts to meet international competition with investments in education and research, renewable energy, biomedical science and information technologies. Obama’s call to action still matters. more...

Over the past two decades, a wage subsidy operating through the tax system called the Earned Income Tax Credit has developed into America’s biggest program specifically dedicated to lifting low-income citizens out of poverty. Many Republicans as well as Democrats support this tax subsidy, which goes to people who work for modest wages. The extra money helps to reduce deprivation among poor families with children—something liberals very much want to do—yet it is the opposite of the sort of no-strings-attached “handout” that conservatives often decry.

As a tool to reduce poverty, the Earned Income Tax credit has a lot going for it. But it also has important limitations. The credit can be improved, and other programs are needed to help poor people find and hold jobs. more...

“Almost half of all Americans pay no taxes!” That’s the claim bandied about in elections and overheated television talk-fests. It refers only to federal income taxes, from which various groups are exempt. But many other taxes are also collected at the federal, state, and local levels. When all kinds of taxes are added up, almost all Americans pay substantial amounts.  In fact, poor and middle-income people frequently fork over higher shares of their incomes than the very rich.

Federal Income and Payroll Taxes

The U.S. federal government relies on two big taxes collected from large numbers of Americans: the federal income tax and payroll taxes regularly deducted from wages and salaries to cover Social Security and Medicare benefits. Income and payroll taxes each contribute about 40% of federal revenues. Almost half of U.S. households currently do not owe federal income taxes, but over three-fifths of these “non-filers” are workers who contribute very substantial payroll taxes. For example, Americans making the lowest incomes pay nearly 9% of their wages in payroll taxes, about the same percentage as middle-income workers pay.

Only about 17% of American households pay neither income nor payroll taxes, because they are headed by people in special sub-groups:

• Elderly men and women, who previously contributed payroll taxes during their working lives, living on their Social Security benefits.
• Students or disabled individuals.
• Workers unable to find jobs. During the recent recession, the numbers of long-term unemployed people not filing income tax returns went up.
• Active-duty members of the U.S. military, who do not have to pay taxes on their combat pay and do not owe income tax after having been deployed. more...
  

Occupy Wall Street has put a public face on the backlash against growing inequality. As most Americans struggle to make ends meet, income and wealth at the very top continue to burgeon, in bad times as well as good. Although rag-tag protesters have been vilified, protests against the widest economic disparities in more than a century resonate with the wider public. For some time, the best research has documented shared American worries about inequality and broad support for steps to enhance opportunity. more...

Not long ago, the U.S. Census Bureau delivered very bad news about poverty in the United States. In 2010, 15.1% of Americans had incomes below the poverty line—set at $22,113 for a family of four—and the poverty rate for 2011 will be even higher. For older people who remember that poverty fell to 11.1% back in 1973, it may seem puzzling that things have gotten so much worse. Rising poverty is not a recent development either. Things were getting worse well before the Great Recession of December 2007 through June 2009. Given the way the U.S. economy works in our era, sluggish growth, high levels of joblessness, and persistently high poverty are likely to persist for years—unless our political leaders change course and do more to help the poor and near-poor. more...

The outcomes of the elections held on November 6, 2012 will have a big impact on students and other young Americans. The presidential candidates and their parties have taken sharply different stands on college costs, job opportunities, health care, social issues, voting rights, and investments in the nation’s future – all issues of special relevance to young people.

Paying for College – and Debt after Graduation

Since 1985, the price of a college degree has risen at more than twice the rate of inflation. Americans now owe more for student loans than for credit card debt. In response, President Obama increased Pell grants, simplified student aid applications, made it easier for ex-students to repay loans, and ended unnecessary subsidies to banks. The Obama administration has also moved to help students get accurate information on the costs and benefits of various colleges and universities. more...

“We have a unique opportunity to sweep and remake the political landscape,” declared Congressman Paul Ryan, chair of the House Budget Committee, to a gathering of Republican faithful and Tea Party activists. The audience laughed and cheered as Ryan promised to lead a crusade to revamp U.S. taxes and domestic programs. Backed by almost all of his Republican Congressional colleagues, Ryan’s radical budget plan would:

• Make immediate drastic cuts in social benefits—leading to slower economic growth, more unemployment, and additional hardships for the jobless, poor, and disabled.
• Bite with increasing force over time—steadily squeezing the resources the federal government needs to help most citizens, while pushing costs for health care and other social needs onto state and local governments already under severe fiscal strain.
• Slash taxes for the wealthy. As a joke circulating in Washington puts it, the Ryan plan means cuts for everyone. The rich get huge new tax cuts and most Americans get draconian cuts in education, job training, college loans, health care, and other necessities.
• Leave the U.S. Treasury coping with big deficits. Despite massive spending cuts, nonpartisan analysts calculate that the Ryan budget would actually increase the deficit. more...