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What’s Up, What’s Down and Why, at the End of the Day, We’re In This Together

Jared Bernstein4/19/12

bernstein@cbpp.org

Source: Inclusive Fitness in Evolution, Ferriere and Michod, 2011.

But How Does This Map Onto Economic and Social Policy?

• Growing together, growing apart• What is the role of gov’t?• Great recession and its aftermath (what’s

up/down?)• Fiscal policy: debt and deficits don’t have to

be as scary as they are.• Can we get from here to there given today’s

politics (and politicians)?

Fellow Nutmeggers!

• I bring a message of hope!• Yes, things are more than a little screwed up, but…• Solutions to our biggest problems are either

known or we have good hypotheses.(inadequate employment growth, health care costs,

revenues, inequality, political dysfunction)• We just need to transfer from vicious to virtuous

cycle.

Current Recovery

• Slow improvement• Why haven’t we hit “escape velocity?”-- “corrections” not yet behind us and some new

stuff in front.• Looming fiscal cliff!• Forecasts• But—a lot of what we did actually worked!

CT

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Germans over the past three years have paid an average of $2.64 a gallon (excluding taxes), while Americans paid $2.69, even though the U.S. produced 5.4 million barrels of oil per day while Germany produced just 28,000.--WSJ.com

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So, What’s the Best Way Forward?• Near-term: avoid fiscal cliff dive• Clear-eyed look at what’s coming and how

that relates to role of gov’t (demographics, climate, innovation, global connectedness)

• Preserve the gov’t we need (House budget most pointedly does NOT do this)

• Restore spirit of compromise (new politicians?)

• Fairness, common sense, YOYOs vs WITTs

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The $3.3 trillion includes the following four categories of cuts:

--$2.4 trillion in reductions from Medicaid and other health care for people with low or moderate incomes.

--$134 billion in cuts to SNAP, formerly known as the Food Stamp Program.

--At least $463 billion in cuts in mandatory programs serving low-income Americans (other than Medicaid and SNAP).

--At least $291 billion in cuts in low-income discretionary programs.