April, 08 2021, 12:00am EDT
NEW REPORT: Congress Must Go Big on Upcoming Investments; Economists Warn of Costly Long-term Consequences for America's Future if Congress Fails to Act
Economists Adam Hersh and Mark Paul show that inadequate fiscal policy cost the economy at least $8 trillion over past decade – more than $32,000 in lost income per adult
WASHINGTON
Today, Groundwork Collaborative released a new report from Dr. Adam Hersh, Director of Washington Global Advisors, LLC and a Research Associate at the Political Economy Research Institute, University of Massachusetts Amherst, and Dr. Mark Paul, Assistant Professor of Economics and Environmental Studies at New College of Florida, highlighting the costs of underspending in the wake of previous recessions and the need for massive investments from Congress to bring the economy back to full employment and broad-based recovery and growth.
The new report argues that we can't afford to repeat the mistakes of the Great Recession by cutting off government investments too early or aiming too low. The authors find that running the economy "too cold" after the Great Recession created at least an $8.2 trillion gap over the past decade that left millions of potential workers out of the labor force, prevented wage growth, and deterred investments that would boost long-run efficiency, productivity and prosperity. In short, the costs of inaction outweigh the risks of borrowing to take action -- by trillions of dollars.
The report demonstrates how by running the economy "hot" with up to $10 trillion in additional investments, Congress can ensure recovery achieves broad-based job creation and boosts productivity to raise America's long-term economic prospects. It also highlights how the Congressional Budget Office (CBO) consistently underestimated "potential output" and overestimated future interest rates, which exaggerated budgetary costs and led policymakers to hit the brakes on spending far too early in past recoveries.
Key excerpts from the paper (read the full paper here)
- "The $2 trillion American Jobs Plan (AJP) takes a step in the right direction...with investments in infrastructure, economy-wide decarbonization and environmental justice, and caregiving that will yield a more productive, equitable, and sustainable economy. But with needs estimated at roughly five times as much as the AJP proposes, there is still a long road to walk."
- "...Congress has ample fiscal space to responsibly pursue such an agenda... a failure to use this space actively endangers America's economic future, making everything more difficult: recovering from the pandemic; redressing economic, gender and racial inequities; meeting the climate challenge; competing on technologies of the future, and managing the country's long-term fiscal position."
- "Simply returning the economy to its pre-pandemic status quo is not an option. Congress should now run the economy 'hot,' investing big to achieve true full employment, redress chronic racial and gender inequalities, and avert a looming climate catastrophe. Such investments will make the economy fairer, more sustainable, and more efficient while ensuring the country has the resources to keep building towards greater and more broadly shared prosperity."
Findings from the "Room to Run" paper include:
- Past policy decisions pulled the rug from underneath economic expansions too soon by providing too little fiscal support and tightening interest rates too early. Far from an overheating economy, America has run its economy "too cold," leaving millions of potential workers out of the labor force, forestalling broad wage growth, and deterring investments that would boost long-run efficiency, productivity and prosperity.
- Relative to the pre-Great Recession trend -- which was still below full employment -- inadequate fiscal policy cost the economy at least $8.2 trillion in GDP combined from 2010 to 2019. This amounts to $32,317 in lost income per adult -- roughly equivalent to one year's income for the median household with two adults. These costs have been borne disproportionately by lower-income workers and communities of color.
- Past policy choices have been guided by the Congressional Budget Office's (CBO) mistaken projections that consistently underestimated "potential output" and an overestimated future interest rates. These mistaken projections exaggerated budgetary costs and led policymakers to hit the brakes on spending far too early in past recoveries, entrenching long standing racial and gender inequities, and deterring investments that would raise efficiency and living standards over the long term.
- Built into the CBO model are deeply problematic and racialized assumptions about how low the unemployment rate can go without inflation, known as the "natural rate." CBO defines a "natural rate" for Black workers that is more than double the rate of white workers, and a "natural rate" for Latinos more than one-third higher.
- Going too small on spending in past recoveries did more than make the economy more unequal -- it created a self-reinforcing cycle of economic underperformance that permanently reduced America's potential for growth and prosperity.
The Groundwork Collaborative is dedicated to advancing a coherent and persuasive progressive economic worldview and narrative capable of delivering meaningful opportunity and prosperity for everyone. Our work is driven by a core guiding principle: We are the economy. Groundwork Collaborative envisions an economic system that produces strong, broadly shared prosperity and power for all people, not just a wealthy few.
LATEST NEWS
Cori Bush Demands Repeal of 'Zombie Statute' Weaponized by Anti-Abortion Zealots
"The Comstock Act must be repealed," said the Missouri Democrat.
Mar 27, 2024
Rep. Cori Bush on Tuesday called for the repeal of a long-obsolete law that anti-abortion activists, lawmakers, and judges have worked to revive as part of their nationwide assault on reproductive rights.
"The Comstock Act must be repealed," Bush (D-Mo.) wrote in a social media post on Tuesday as the U.S. Supreme Court heard oral arguments in a case brought by a group of anti-abortion doctors aiming to curtail access to mifepristone—a medication used in more than 60% of U.S. abortions.
"Enacted in 1873, it is a zombie statute, a dead law that the far-right is trying to reanimate," Bush warned. "The anti-abortion movement wants to weaponize the Comstock Act as a quick route to a nationwide medication abortion ban. Not on our watch."
Bush's office said she was the first member of Congress to demand the law's repeal since the U.S. Supreme Court overturned the constitutional right to abortion in the summer of 2022.
The Comstock Act, which hasn't been applied in a century and was repeatedly narrowed following its enactment, prohibits the mailing of any "instrument, substance, drug, medicine, or thing" that "may, or can, be used or applied for producing abortion." Legal experts have described the dormant law as the "most significant national threat to reproductive rights."
Given that "virtually everything used for an abortion—from abortion pills, to the instruments for abortion procedures, to clinic supplies—gets mailed to providers in some form," a trio of experts wrote earlier this year, the anti-abortion movement's "interpretation of the Comstock Act could mean a nationwide ban on all abortions, even in states where it remains legal."
"Enforcing a Victorian-era law would be deeply unpopular and Democrats have a chance to sound the alarm, take action in both chambers, and run on it."
The Biden Justice Department has argued that the Comstock Act "does not prohibit the mailing of certain drugs that can be used to perform abortions where the sender lacks the intent that the recipient of the drugs will use them unlawfully."
But the law has nevertheless been cited with growing frequency by far-right advocacy groups and judges following the overturning of Roe v. Wade.
In 2023, a Trump-appointed federal judge in Texas, Matthew Kacsmaryk, invoked the Comstock Act in a decision suspending the Food and Drug Administration's 2000 approval of mifepristone. In 2021, the FDA said it would allow patients to receive abortion medication by mail—which Kacsmaryk claimed the Comstock Act "plainly forecloses."
That case, which has massive implications for abortion rights nationwide, is now before the U.S. Supreme Court.
During oral arguments on Tuesday, Justices Justices Samuel Alito and Clarence Thomas "repeatedly invoked the Comstock Act," The Washington Postreported, "pressing lawyers about whether the 1873 federal law should apply to abortion drugs sent through the mail today."
The justices' comments raised concerns that they could try to resurrect the Comstock Act in their coming ruling in the mifepristone case.
"While the Biden administration has issued guidance saying that the federal government
will not enforce the laws," the Post noted, "a future administration seeking to restrict abortion could choose to do so."
Donald Trump, the former president and presumptive 2024 Republican nominee, has expressed support for a national abortion ban.
Jezebel's Susan Rinkunas wrote Tuesday that "enforcing a Victorian-era law would be deeply unpopular and Democrats have a chance to sound the alarm, take action in both chambers, and run on it."
"We definitively have one lawmaker on board," Rinkunas added, referring to Bush. "Who's next?"
Keep ReadingShow Less
Container Ship That Destroyed Baltimore Bridge Has Troubled History
The Maersk-chartered MV Dali—which lost propulsion just before the collision—not only was involved in a previous crash, but was also briefly detained last year over problems with its propulsion system.
Mar 26, 2024
The mega-container ship that lost propulsion before toppling Baltimore's Francis Scott Key Bridge in a Tuesday morning collision was involved in a previous crash, and was cited last year for propulsion-related problems.
Newsweekreported that the Maersk Line Limited-chartered MV Dali—which crashed into the Interstate 695 Patapsco River crossing just before 1:30 am, causing the span to collapse and sending a construction crew into the water—collided with a wall in the harbor at Antwerp, Belgium in 2016. The accident, which was reported by Vessel Finder and other outlets at the time, was attributed to errors made by the ship's master and pilot.
The 9-year-old Dali was also detained by port officials in San Antonio, Chile last June after inspectors discovered a problem related to the vessel's "propulsion and auxiliary machinery," according toThe Washington Post, which cited records from the intergovernmental shipping regulator Tokyo MOU.
The ship's owner, Grace Ocean Private Ltd., and operator, Synergy Marine, "have been sued at least four times in U.S. federal court on allegations of negligence and other claims tied to worker injuries on other ships owned and operated by the Singapore-based companies," according toThe Associated Press.
Maersk was also sanctioned last year by the U.S. Labor Department for allegedly stopping employees from reporting safety concerns, documents published by The Lever revealed.
According to a July 14, 2023 Labor Department letter to Maersk regarding an Occupational Safety and Health Administration investigation, the Danish company "suspended and then terminated" a worker "in retaliation for reporting unsafe conditions and contacting the U.S. Coast Guard."
The fired employee "engaged in numerous protected activities" including reporting a leak and the need for repairs to a ship's cargo hold bilge system, alcohol use aboard the vessel by crew members, and inoperable equipment including an emergency fire pump and lifeboat block and releasing gear.
The search for six construction workers who were on the bridge when it collapsed into the river was suspended until Wednesday, according toThe Associated Press. The workers are presumed dead by their employer, Brawner Builders. Local media reported that multiple vehicles plunged into the river and that two workers—one of whom was briefly hospitalized—were rescued from the water.
Keep ReadingShow Less
Pentagon Urged to Just Say No to AI-Powered Killer Robots
"The Department of Defense should declare its opposition to the development and deployment of autonomous weapons."
Mar 26, 2024
The watchdog group Public Citizen on Tuesday led a letter urging Pentagon leaders "to clarify that the Replicator Initiative will not involve the development and deployment of autonomous weapons systems," also known as "killer robots."
Last September, U.S. Deputy Secretary of Defense Kathleen Hicks "asserted that the development of all-domain, attributable autonomy systems (ADA2) is an essential way for the Pentagon to maintain its comparative cutting-edge and keep up with the technological advancements of other states," notes the letter, which was addressed to her and Defense Secretary Lloyd Austin.
"However, those comments failed to specify whether or not supporting autonomous weapons systems is one of the key focuses of this initiative," the letter stresses. "When addressing whether or not 'ADA2 means weapons systems,' Secretary Hicks stated: 'That's a serious question to be sure. They are not synonymous. There are many applications for ADA2 systems beyond delivering weapons effects.'"
"Autonomous weapons are inherently dehumanizing and unethical, no matter whether a human is 'ultimately' responsible for the use of force or not."
Public Citizen and the 13 other organizations argued that "this is no place for strategic ambiguity. Autonomous weapons are inherently dehumanizing and unethical, no matter whether a human is 'ultimately' responsible for the use of force or not."
Deploying lethal weapons that rely on artificial intelligence (AI) "in battlefield conditions necessarily means inserting them into novel conditions for which they have not been programmed, an invitation for disastrous outcomes," the groups warned. "'Swarms' of the sort envisioned by Replicator pose even heightened risks, because of the unpredictability of how autonomous systems will function in a network. And the mere ambiguity of the U.S. position on autonomous weapons risks spurring a catastrophic arms race."
"We believe the Department of Defense should declare its opposition to the development and deployment of autonomous weapons," the coalition concluded. "However, even if you are not prepared to make that declaration, we strongly urge you to clarify that the Replicator Initiative will not employ autonomous weapons."
In addition to Public Citizen, the coalition included the American Friends Service Committee, Autistic Women & Nonbinary Network, Backbone Campaign, Demand Progress Education Fund, Fight for the Future, Future of Life, National Priorities Project at the Institute for Policy Studies, RootsAction.org, United Church of Christ, the Value Alliance, Women's International League for Peace and Freedom U.S., Win Without War, and World Beyond War.
The letter comes on the heels of Public Citizen releasing a report about the rise of killer robots, AI Joe: The Dangers of Artificial Intelligence and the Military.
The February report addresses the Pentagon's AI policy, the dangers of killer robots, the need to ensure decisions about nuclear weapons aren't made by automated systems, how artificial intelligence can increase not diminish the use of violence, risks of using deepfakes on the battlefield, and how AI startups are seeking government contracts.
The publication concludes with recommendations that Public Citizen president Robert Weissman echoed in a statement Tuesday.
"The United States should state plainly that it will not create or deploy killer robots and should work to advance global treaty negotiations to ban such weapons," Weissman said. "At minimum, the United States should commit that the Replicator Initiative will not involve the use of autonomous weapons."
"Ambiguity about the Replicator program essentially ensures a catastrophic arms race over autonomous weapons," he added. "That's a race in which all of humanity is the loser."
Keep ReadingShow Less
Most Popular