Robert B. Reich, a co-founder of The American Prospect, is a Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. His website can be found here and his blog can be found here.
The Washington Post The economy is slowing, yet the surplus keeps growing. President-elect W. wants to use both to justify a big tax cut. How should the Democrats respond? (A) Warn once again that a big tax cut will jeopardize Social Security and that a better use for the surplus is to pay down the nation's debt. (B) Reject any fiscal stimulus and trust Alan Greenspan alone to achieve a "soft landing." (C) Agree with Bush that a fiscal stimulus would be useful and appropriate, but argue that it should take the form of new spending on education, health care, child care and public transit rather than a tax cut. (D) Concur with Bush that a tax cut is appropriate but demand that it favor poor and working families instead of the rich. Answer: (D). Bush doesn't have a prayer of getting his touted $1.3 trillion tax cut through the next Congress, of course. Not even the Republican leadership is in favor. But unless Democrats counterpunch with one of the above, the betting is that a good-sized...
Broadcast June 7, 2001 Presidents are lucky if they accomplish one big thing in a term of office. The American political system is designed to make even one big thing difficult to get done, especially if there's no economic or foreign crisis to coral public support. President Bush has already got done one very big thing -- a tax cut of large proportion, approximately the size of the cut he campaigned on. Democrats complain that we can't afford it -- that the cut is fiscally irresponsible because it will create deficits if the President tries to do the other things he s promised, like upgrading the military, and paying the costs of privatizing Social Security, while at the same time preserving Medicare and giving a prescription drug benefit. But the complaint "we can t afford it" is easily countered by the supply-side mantra that tax cuts, especially for the well-to-do, will lead to greater economic growth, because people who can keep more of their earnings will have a grater incentive...
Broadcast September 27, 2001 Federal Reserve Chairman Alan Greenspan has told Congress to wait and see what happens before enacting a stimulus package. Congress is heeding his advice. It shouldn't. A stimulus is needed right away. Even before the September 11th terrorist attack, American consumers were in a deep funk. Personal savings rates were nearing a 70-year low, and debt was at record heights. Jobs were already disappearing. No wonder that, according to the Conference Board survey released this week, September marked the largest one-month drop in consumer confidence since October 1990, and almost all that survey was done before the terrorist attack. As consumers pull back from spending and the economy falls into recession, the people hurt the most are those likely to lose their jobs first and have no cushion to fall back on. I'm talking about retail store clerks, restaurant workers, janitors, hotel cashiers and other low-wage service workers. It's estimated that more than 100,...
To listen to the White House and Republicans, you'd think the biggest
choice facing the nation is whether to use projected budget surpluses to
"save Social Security," as the White House proposes, or to cut taxes
across the board, as Congressional Republicans propose.
Because the polls show most Americans want both, you can bet that
whatever emerges will be a mushy combination.
Is this really the Great Debate we ought to be having?
No. Look closely, and neither alternative makes any sense.
Social Security doesn't have to be saved because it's not heading for a
crisis. The projected bankruptcy of Social Security by 2032 is based on the
wildly pessimistic prediction that between now and then the U.S. economy
will grow only 1.8% a year. Almost all economists predict growth will be
2.4% or better. It's been 4% for the last three years.
If the economy grows by at least 2...
Broadcast Oct 5, 2001 Alan Greenspan is pushing on a wet noodle. The Fed has repeatedly cut interest rates since January and nothing's happened which means that we shouldn't expect this week's half percent rate cut to have much impact either. Even figuring in the normal time lag between a rate cut and response, the fact is this economy just isn't responding. Luckily the car has two accelerators. If the Fed's monetary policy isn't enough, there's fiscal policy. This week, the president lent his support to a stimulus package of between $60 billion and $75 billion in the form of additional tax cuts and spending. Now the good news is that the White House and Congress are no longer obsessing about saving the Social Security surplus or indulging in any other accounting fiction. The national economy is near or in a recession, and Washington understands that now is the time for government to spend more and tax less even if that means temporarily going into the red. The bad news is that...