Policy Update - Thanksgiving 2017
Just after the last federal election, the Center on Capital & Social Equity suggested that the policies below could help make the U.S. economy more inclusive and improve the lives of many citizens. One year later, we note that Congress and the Trump Administration have yet to make any progress in these areas.
Instead, those in power have focused on two major policy initiatives:
1. Reducing citizens' access to affordable health insurance (by repealing the ACA and cutting Medicaid) and using the savings to cut taxes, primarily for the wealthy, and
2. Overhauling the tax code to provide major tax cuts for the wealthy at the expense of cutting government programs serving most Americans and constricting the nation's future options by swelling our national debt.
Inclusive Economic Policies for Consideration
by the New President and Congress (December 2016):
- Improve Social Security benefits for the lowest earners. Part of this could be financed by removing the current income cap on Social Security taxes. Raise Social Security and SSI benefits for the very old and for nursing-eligible elderly who have been receiving long term care for many years.
- Create a universal retirement savings system for all workers including specified minimum contributions from the government, employers, and employees.
- Raise the minimum wage to a “living wage level” based on cost of living in a state or region. The minimum wage could be raised to $12 an hour with states given the authority to adjust minimum wages (10%?) lower to account for geographic variation. States of course can always set the minimum wage higher. Most important: no matter where minimum wage levels are set, in the future they need to be adjusted to reflect changes in the cost of living. Alternative approaches include broadening the reach of the earned income tax credit and improving its take-up rate.
- Initiate a major national commitment to expand job opportunity and job training:
Increase financial aid for low- and moderate-income people for college education and technical training. Interest rates for college and technical training loans should not exceed the overnight borrowing rate charged by the Fed by more than a reasonable amount (2 percentage points?).
Work with universities and colleges to improve training programs for an economy that will see increasing automation and use of computer technology.
- As part of the effort above, provide citizens with an opportunity to have at least one year of paid service in federal employment in the armed services or in federally sponsored projects improving national infrastructure -- or one year of training toward a career. Citizens can take this option at any point in their working lives, but must meet performance standards to receive compensation or benefits.
Tasks could include fixing roads, picking up trash, improving water systems, development of renewal energy infrastructure, and mitigating damage to coastline cities from rising sea levels, should this occur.
- Provide business incentives to keep technology development and manufacturing jobs in the U.S.
- Agree to sign the Trans-Pacific trade deal and continue support of expansive international trade only if a substantial commitment is made toward retraining displaced workers.
- Control illegal immigration, not through building physical walls, but by fining and publicizing employers who repeatedly hire illegals.
Center on Capital & Social Equity -- www.inequalityink.orits
Developing public policy involves resolving conflicts over underlying values. Which of the following three “values” below do you think is the most important?
Protecting basic freedoms (e.g., speech/expression, religious practice, ability to own private property and engage in commerce)
Helping the poor and less fortunate meet basic needs.
Protecting and strengthening equal opportunity and an equitable, cooperative society (e.g., supporting Social Security, Medicare, and a progressive tax system).
"The Wealth of Nations" - Adam Smith
"Capital in the 21st Century" - Thomas Piketty
"Global Inequality: A New Approach for the Age of Globalization" - Branko Milanovic
"The Spirit Level: Why Greater Equality Makes Societies Stronger" - Kate Pickett & Richard Wilkinson
"The Price of Inequality" - Joseph Stiglitz
"$2 a Day: Living on Almost Nothing in America" - Kathryn Edin & Luke Shaefer
"The Road to Serfdom" - F. A. Hayek
"Micromotives & Macrobehavior" -Thomas Schelling
"The Federalist Papers" - Publius
"A Theory of Justice" & other writings - John Rawls
" The Age of Jackson" - Arthur M. Schlesinger, Jr.
"Team of Rivals: The Political Genius of Abraham Lincoln" - Doris Kearns Goodwin
"The Secret History of the War on Cancer" - Devra Davis
Topics for Research & Analysis
Is there a relationship between wealth distribution and economic growth? If so, at what level of wealth distribution is economic production optimized? How to engage and include low-income workers in the risks and profits of capitalism.
Monitoring, analyzing trends in income and asset concentration.
How can policymakers optimize the relationship between economic liberty and wealth distribution? What are the policy options and trade-offs? What type of tax system optimizes the economic benefits for the society as a whole?
What is the relationship between levels of wealth and income concentration and the stability of democratic governance?
What is the “middle class?" What role does it play in stabilizing democratic nations? What are its special functions and obligations, if any?
Developing universal inclusion in defined contribution retirement plans through starter accounts and education in high school.
Exploring the social and psychological aspects and “option value” of establishing access to affordable health care for all citizens.
Exploring ways to integrate Medicare, Medicaid, and federal health coverage subsidies through a national health insurance marketplace offering the same plans to everyone. Where is the balance point between government and the marketplace?
How can the U.S. increase retirement security? Reduce the risks posed by the need for long term care? What is the best balance of private and public funding?
Exploring Core Values:
What role can traditional Judeo-Christian values and ethics play in the evolution of capitalism (and vice versa)? Is there such a role? Should there be?
Does focusing on “inequality” imply that equality should be the norm? If so, how equal can, or should, people be in economic terms?
How should the cost of maintaining environmental quality be evaluated and distributed?
Vaccination policy: Should some vaccines be mandatory? What are the short and long-term risks and benefits of increased use?