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.
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...
Los Angeles Times Senate Democrats have managed to whittle George W 's tax cut from $1.6 trillion to $1.2 trillion. Big deal. Last year, Bill Clinton vetoed a $700 billion tax cut. And once the Senate tax bill goes to conference with the House, it's sure to be back up there where Bush wants it. Democrats can't fight Bush's tax cut with nothing but an admonition that it's "too large." They need to put something else on the table that's important to working Americans -- and which won't be possible if the surplus is used for Bush's tax cut. That something is universal health care. Besides, what better time than now to revive the idea of universal health care? There's a huge budget surplus. Meanwhile, the number of Americans lacking health insurance continues to rise (now almost 43 million, up from 38 million ten years ago). And those who have it are paying more than ever in co-payments, deductibles, and premiums. About 28 million households now spend more than 10 percent of their pay on...
The Financial Times
Like generals preparing to fight the old war, the world's central bankers are
still obsessed with inflation. They should be looking forward to the real
Look around the world and what you see are identical policies in favour of
trimming public spending, cutting debt, raising interest rates and squeezing
Euroland has made deficit reduction the ticket to admission. The
International Monetary Fund still screams "austerity!" at any hint that capital
may flee a developing nation. And in the US, the Delphic and venerable Alan
Greenspan, the US Federal Reserve chairman, told the Senate banking
committee last month that the Fed would continue to evaluate "whether the
full extent of the policy easings undertaken last fall to address the seizing-up
of financial markets remains appropriate as those disturbances abate".
Translated: If we do anything over...