Tag Archives: EITC

8 Policy Recommendations for Newly Elected Members of Congress

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On December 3, 2014, I participated in a panel of Harvard University’s Bipartisan  Program  for  Newly Elected Members of Congress.   After establishing that the median US household has not shared in recent strong economic gains, I went on to consider policy remedies.

I offered the Congressmen eight policy recommendations.  Some will sound popular, some very unpopular; some associated with “liberals”, some with “conservatives.”   I would claim that they all have in common heavy support from economists, regardless of party – even the very unpopular ones. read more

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How to Address Inequality

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Inequality has received a lot of attention lately, particularly in two arenas where it had not previously received as much: American public debate and the International Monetary Fund.  A major driver is the observation in the United States that income inequality has now returned to the extreme levels of the Gilded Age.  (The share of income held by the top 1% rose from 8% in 1980 to 19% in 2012, a level last seen in 1928, and probably the highest among advanced countries.  The share held by the top 0.1% rose from 2% to almost 9% currently, a level least seen in 1916. And mobility remains as low as ever.)  Inequality remains high in Latin America and has increased in many other parts of the world as well. read more

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What Do Obamacare and the EITC Have in Common with Cap-and-Trade?

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My preceding blog post described how market-oriented mechanisms to address environmentally damaging emissions, particularly the cap-and-trade system for SO2 in the United States, have recently been overtaken by less efficient regulatory approaches such as renewables mandates.   One reason is that Republicans — who originally were supporters of cap-and-trade — turned against it, even demonized it.

One can draw an interesting analogy between the evolution of Republican political attitudes toward market mechanisms in the area of federal environmental regulation and hostility to the Affordable Care Act, also known as Obamacare.   The linchpin of the program is the attempt to make sure that all Americans have health insurance, via the individual mandate.  But Obamacare is a market mechanism, in that health insurers and health care providers remain private and compete against each other.    read more

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