Category Archives: Economy

Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output From July 2010 Through September 2010

Source: Congressional Budget Office, November 2010

From the abstract:
The American Recovery and Reinvestment Act of 2009 (ARRA) contains provisions that are intended to boost economic activity and employment in the United States. Section 1512(e) of the law requires the Congressional Budget Office (CBO) to comment on reports filed by recipients of ARRA funding that detail the number of jobs funded through their activities. This CBO report fulfills that requirement. It also provides CBO’s estimates of ARRA’s overall impact on employment and economic output in the third quarter of calendar year 2010. Those estimates–which CBO considers more comprehensive than the recipients’ reports–are based on evidence from similar policies enacted in the past and on the results of various economic models.
See also:
CBO blog post

Investing in America’s Economy – A Budget Blueprint for Economic Recovery and Fiscal Responsibility

Source: Becky Thiess, Andrew Fieldhouse, Dēmos, Economic Policy Institute, and the Century Foundation, November 29, 2010

From the summary:
Putting our nation on a path of broad prosperity will require generating new jobs, investing in key areas, modernizing and restoring our revenue base, and greatly increasing the cost efficiency of the health care system. Achieving these goals, however, will require an informed and engaged public to help set national priorities.

The following report puts forth a blueprint that invests in America and creates jobs now, while putting the federal budget on a long-term sustainable path. We document the hard choices that need to be made and suggest specific policies that will yield lower deficits and a sustainable debt while preserving essential initiatives and investments.

Delivering the Next Economy: The States Step Up

Source: Bruce Katz, Jennifer Bradley, Amy Liu, Brookings Institution, Metropolitan Policy Program, November 2010

From the summary:
In January, 37 governors, many of them new, will take office facing daunting challenges, including many immediate needs for which there is precious little time or money to meet. But at the same time, they have an opportunity to lead their states, and the nation, into the next economy, which must be driven by exports, powered by low carbon, fueled by innovation, rich with opportunity. An economy with those characteristics will also be metropolitan-led.

Deeper budget cuts and more public sector layoffs will not re-balance and re-start our economy. Only wise, strategic investment does that. States should, therefore, do three things to revive their state economies and lay the groundwork for future prosperity:

1) Invest in new ways to support the assets that drive the next economy.
2) Cut to invest to jumpstart the transition to the next economy.
3) Leverage investments through smart metropolitan strategies.

The Role of Unemployment as an Automatic Stabilizer During a Recession

Source: Wayne Vroman, U.S. Department of Labor, ETAOP 2010-10, November 16, 2010

From the press release:
The Unemployment Insurance (UI) system helps the population most directly affected by recessions–those who have lost jobs through no fault of their own. This focus makes it one of the most effective targeted tools for maintaining American families’ purchasing power and keeping the economy on track during an economic downturn. Unemployment creates a snowball effect where people who have lost their job reduce their spending causing businesses to lose money and others to lose their jobs. Unemployment insurance acts to reduce this effect by helping the unemployed to continue to purchase vital goods and services for their family.
Related:
Unemployment Insurance Benefits and Family Income of the Unemployed
Source: Congressional Budget Office, November 17, 2010
New CBO & DOL Studies Underscore Need For Full‐Year Renewal Of Unemployment Insurance
Source: National Employment Law Project, Press Release, November 18, 2010

The Federal Government’s Long-Term Fiscal Outlook: Fall 2010 Update

Source: U.S. Government Accountability Office, GAO-11-201SP, November 15, 2010

From the summary:
GAO’s annual fall update of its long-term simulations underscores the need to address the long-term sustainability of the federal government’s fiscal policies. While the economy is still fragile and in need of careful attention, there is wide agreement on the need to look not only at the near-term but also at steps that begin to change the long-term fiscal path as soon as possible without slowing the recovery. With the passage of time the window to address the long-term challenge narrows and the magnitude of the required changes grows. The federal government faces long-term fiscal pressures that predate the economic downturn and are driven on the spending side largely by rising health care costs and an aging population.

Austerity

Source: Challenge, Vol. 53, No. 6, November/December 2010
(subscription required)

From the Editor:
Should the United States inject more stimulus into the economy through a second round of government spending? We present pieces on this critical subject, all of which question the need for austerity at this moment. The recovery since mid-2009 has not been strong by historical standards–those that followed similarly steep recessions in 1973-75 and 1982 were much more robust. The reasons are not hard to find. The extreme indebtedness of American consumers, the overreaching of the financial community, and the collapsed housing values have made it especially difficult to regenerate consumer and business spending. For more than a year, the unemployment rate has exceeded 9 percent.

In light of these factors, big spending by government, according to Keynesian economists, makes enormous sense. But largely because of major tax cuts, the country entered the recession with large budget deficits. The sharp reduction in tax revenues since then has expanded the deficit even further.

Now, a group of passionate and influential economists, policymakers, and private citizens has arisen to demand, not fiscal stimulus, but the opposite–out of fear of generating future recessions. These deficit hawks are effectively putting a lid on any new stimulus plans. The economist Robert Pollin challenges the deficit hawks in one of the most comprehensive pieces written on the subject and shows a way forward.

Articles include:
Austerity Is Not a Solution: Why the Deficit Hawks Are Wrong
Robert Pollin

When Is Austerity Right?: In Boom, Not Bust
Arjun Jayadev and Mike Konczal

Absurd Austerity Policies in Europe
Philip Arestis and Theodore Pelagidis

The Massive Shedding of Jobs in America
Andrew Sum and Joseph McLaughlin

America and the Crossroads of Capitalist Globalization
Peter Nolan

Rising Inequality, Public Policy, and America’s Poor
Lane Kenworthy

How Well Have Americans Been Doing?
Stephen J. Rose and John Schmitt’s

The Failure of Capitalism
Mike Sharpe

States’ Tax Revenues Show Gradual Recovery

Source: Lucy Dadayan and Donald J. Boyd, Nelson A. Rockefeller Institute of Government, State Revenue Report, no. 81, October 2010

From the press release:
The second quarter of 2010 represented the second period in a row that states reported overall gains in tax collections — following five straight quarters of decline — according to a new study by the Rockefeller Institute of Government.

Overall state tax revenues grew by 2.3 percent in the second quarter of 2010, according to the Institute’s latest State Revenue Report. Thirty-four states reported gains in revenue during the second quarter, with 12 showing double-digit growth.

The Greening of America Revisited: Can the U.S. Create High-Skill Green Jobs?

Source: Andrew Ross, New Labor Forum, Vol. 19 no. 3, Fall 2010
(subscription required)

From the abstract:
There have been very few silver linings to the Great Recession, but one of them has been the prospect of launching a new industrial revolution powered by renewable energy. In the absence of any other candidates, green industrial policies have been prioritized as a recipe for economic recovery and the key to job creation, whether for building and operating the new energy infrastructure, or weatherizing the existing built environment. The urgency of the climate crisis raised the stakes much higher. Shunning the call for sustainability would not simply be a missed economic opportunity. It would be tantamount to a death sentence for large portions of the world’s population. The desperation of the jobless may have been the proving ground for green planning, but a humanitarian calamity of epochal proportions would be its final verdict if the transition from dirty to clean did not turn out right.