| November 14, 2008 | by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Benjamin Armbruster, Ali Frick, Ryan Powers, and Pat Garofalo Contact Us | Tell-a-Friend | Archives | Permalink | Subscribe to Feed |
A Pro-Growth, Progressive Economic Agenda
Editor's Note: This is the third in our three-part series on "Change for America: A Progressive Blueprint for the 44th President." See part 1 here and part 2 here.
On election day, 60 percent of voters said that the state of the economy is "the most important issue facing the nation." With a resounding progressive victory, the new administration has the opportunity to implement pro-growth, progressive economic policies to get the economy back on track. This week, the Center for American Progress Action Fund, along with the New Democracy Project, released a book called Change for America: A Progressive Blueprint for the 44th President. The book outlines new ideas for governing in the 21st century, and offers suggestions on how to make the economy work for everyone, rather than catering to the richest Americans and largest corporations as has been the policy for the last eight years. In the book, Center for American Progress Action Fund Senior Fellow Gene Sperling explains that "the 44th president must work with both sides of the political spectrum to design policies that boost shared prosperity by strengthening and growing the middle class, not policies that just focus on growth or on equity alone." "Strong and dynamic growth," Sperling writes, "is critical to ensuring the United States always makes room for anyone from anywhere who is willing to work hard and play by the rules without having to force existing groups to settle for less."
MOBILITY AND EQUITY: In their chapter on equality and mobility, Peter Edelman of Georgetown University and Angela Glover Blackwell of PolicyLink ask if America is headed towards a "new gilded age," pointing out that "the American Dream -- that we can all move up the economic ladder -- is far from reality for many people today." Currently, income inequality in the United States is at its highest level since 1928, and only "7 percent of children born to parents in the bottom wealth quintile make it to the top quintile in adulthood," while "36 percent of children born to parents in the bottom wealth quintile remain in the bottom as adults." And U.S. tax policy exacerbates this disparity. "Out of the more than $200 billion in tax incentives offered each year for savings, only about 5 percent goes to the bottom 50 percent of Americans." Edelman and Blackwell write, "The first step is to restore a progressive U.S. tax system in the wake of the Bush administration's tax cuts, which poured hundreds of billions of dollars into the hands of the wealthiest Americans and corporations." The next step is to ensure that all Americans have both living-wage incomes -- through a minimum wage indexed to inflation -- and adequate savings to fall back on. Finally, the next administration must expand educational opportunities through a national commitment to pre-kindergarten, as well as expansion of after-school and out-of-school programs as well as programs that reach at-risk and disconnected youth.
A GREEN RECOVERY: As CAP Vice President for Economic Policy Michael Ettlinger notes, "No source of jobs is poised to be generated by the unaided private market to replace the jobs lost in home construction, the financial sector, and the other areas dramatically affected by the current recession." Therefore, a set of policies aimed at creating jobs is essential to jumpstarting the economy. In her chapter on global competitiveness and trade, CAP Senior Fellow Laura Tyson argues the next administration should invest in a green recovery, creating jobs while simultaneously moving American towards a low-carbon economy. She writes, "Policies to accelerate the development of clean energy alternatives will help create green-collar jobs and build U.S. competitiveness in what promises to be one of the fastest-growing areas of the world economy over the next half-century." CAP reports that a $100 billion investment over two years in a green recovery program would create 2 million new jobs. "We identified $50 billion in programs that are ready to go immediately," says Bracken Hendricks of CAP. "The package would create 2 million jobs across the skill spectrum, from blue collar to high tech, and in almost every area of the country. There was huge congressional appetite for this even before the economic crisis hit."
LONG-TERM PROGRESSIVE GROWTH: True long-term economic success requires both "a growing middle class and rising living standards." As Ettlinger points out, "The economic weakness of recent years was papered over by personal debt underpinned by artificially high valuation of homes and other assets. ... A lesson to be learned from this period is that economic growth that is not buttressed by growing middle-class incomes is illusory -- a house of cards bound to collapse." Thus, CAP has released a Progressive Growth plan aimed at creating long-term opportunity through green recovery, implementing health care reform and labor law reform, as well as enabling all Americans access to a quality education. Sperling writes that the new economic agenda "must focus on policies that both raise the economic tide and lift all boats -- boosting productivity and our gross national product while fostering the shared prosperity that defines our nation's values." But these efforts must also be "paired with a serious commitment to long-term fiscal discipline" through a willingness to confront ineffective domestic and military spending. Implementing the policies outlined here -- as well as many others -- can lead to an economy that excludes no one, to the benefit of everyone.
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