This week, as the news media raised questions about past decisions and events surrounding the financial crisis, EPI sought a forward-looking approach to the issues. Policy and Research Director John Irons began the week with a compelling argument for spending on domestic programs, despite the recent bailout. He asserts that the national debt is not as dire as some alarmists indicate. In fact, the debt as a percentage of gross domestic product is significantly below what it was when Bill Clinton became president. “So by historical standards, there is room to fund stimulus and other initiatives, even without additional revenue,” Irons writes. While the economic situation remains volatile, Irons shows there is no reason to abandon important priorities, such as addressing health care and retirement security or repairing and restoring the nation’s infrastructure.
This week’s Snapshot by Economic Analyst Ethan Pollack also carried policy implications, analyzing which forms of economic stimulus offer the most benefit. The accompanying graph shows in clear terms that tactics like the Bush tax cuts are simply not as effective as investments in food stamps and unemployment insurance, money that people soon pump back into the economy. Additionally, these types of stimuli have the added benefit of assisting those hardest hit by the downturn and tackling long-standing infrastructure needs.
Such recommendations may well carry extra weight when Senior Economist Jared Bernstein testifies before the full House Committee on Education and Labor. During the hearing, which is entitled “Building an Economic Recovery Package: Creating and Preserving Jobs in America,” Bernstein will push for aid to working Americans in readily usable forms–food stamps, unemployment insurance, and investments in infrastructure. EPI’s focus on sensible investments in the country’s workforce appears to be gaining popularity.
Next Wednesday morning, Irons will testify to the House Committee on Transportation and Infrastructure on the benefits of accelerated spending on needed infrastructure projects. Next week, he’ll also release a paper that offers a comprehensive stimulus plan. Stay tuned.