Writing for the CFA Institute, Matthew Gelfand reviews TCF fellow Edward Kleinbard's We Are Better Than This: How Government Should Spend Our Money. Gelfand discusses the significance of Kleinbard's book for the financial industry.
"Kleinbard has written two books in one. The first is a philosophical road map of the progressive case for economic policies on income distribution, infrastructure spending, and social insurance, among others. This discussion is of less utility to financial analysts but—despite Kleinbard’s clear philosophical leanings—is worth mentioning here because his comments on the topic establish that he is a nonideological student of fiscal policy."
"The second book-within-a-book will be of interest to financial analysts who want to understand the mechanics of fiscal policy. It is an informed instruction manual that draws on a large body of data and insightful analysis yet drives forward in layman’s terms rather than economic jargon."
The rest of Gelfand's review is available here.
Social safety net programs in the United States are indeed helpful, but by no means are they an adequate policy solution to lifting every family above the poverty line. TCF fellow Mark Thoma says that social insurance programs are not just a quick fix, but an true investment in our future, therefore need to not be taken lightly.
Even if the number had been calculated correctly, it would overstate the true cost of social insurance programs due to the failure to consider “dynamic effects.” That is, these programs don’t just provide income to struggling households in times of need, income that can have a valuable stimulative effect during economic downturns; social insurance programs are also an investment in our future.
Read Thoma's article from the Fiscal Times.
There are two types of government benefits that are disbursed to citizens, but the recipients of each of these are treated differently depending on their income level. Welfare recipients are often observed with more scrutiny, as if they are expected to not use their benefits properly. The other group of recipients, that is those receiving Pell grants or mortgage loans, are paid less attention to because these types of benefits are part of what TCF fellow Suzanne Mettler calls the "submerged state."
Many, many Americans who do receive these other kinds of government benefits — farm subsidies, student loans, mortgage tax breaks — don't recognize that, like the poor, they get something from government, too. That's because government gives money directly to poor people, but it gives benefits to the rest of us in ways that allow us to tell ourselves that we get nothing from government at all.
Find out more about the "submerged state" from this Washington Post article.
There is much more to the welfare state than meets the eye. A recent New York Times article details the five key lessons pinpointed by scholars that can be taken from past social welfare policy. TCF fellow Suzanne Mettler is cited in the article saying that welfare can be combatted by just blocking changes to current policy, such as what might happen with today's Republican controlled Congress.
Rather than directly assaulting the welfare state, those seeking to remake the American political economy have mostly outflanked it, relying heavily on tactics of gridlock-inducing policy drift to produce major changes in taxes, industrial relations, corporate governance, and financial regulation that have been highly beneficial to the most affluent.
Here is the entire article.
The "social safety net" has been a complicated concept since the 1960's, since many of its programs benefit the poor, but need funding support from the whole population. TCF fellow Edward Kleinbard offers one solution that is highlighted in his book, "We Are Better Than This," which is to "raise[ing] top tax rates to where they were in the Clinton era and pare[ing] some personal tax deductions that benefit the better off."
As demands on Social Security and Medicare grow over time, pressure will be enormous to cut benefits, mostly at the top. If Mr. Cohen was right, this will drain political support from the only universal programs we have left. They may become poor programs too.
Read the NY Times piece featuring Kleinbard.
TCF fellow Harold Pollack takes a deeper look at the data that shows how race affects an employee's 401(k) savings account behavior. He says that although most employees contribute a similar amount to their accounts, minority workers were more likely to invest with caution, even if that means low rates of return.
In effect, these workers were using their 401(k) accounts as current savings reserves or as an emergency fund. As my writing collaborator Helaine Olen noted over email, these apparently foolish savings behaviors suddenly seem to make a lot more sense in the life-context of the people who are actually making these decisions.
Pollack's article from Washington Monthly can be accessed here.
Compared to other advanced nations, America’s retirement security and health care systems offer weaker protections against risks we all face. The Century Foundation’s work focuses on ideas for strengthening Social Security, pensions, and health care – including steps for building on the Affordable Care Act.
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