Newspaper article The Christian Science Monitor

Well-Made Policy vs. Hard-Won Consensus

Newspaper article The Christian Science Monitor

Well-Made Policy vs. Hard-Won Consensus

Article excerpt

AMONG press pundits and economic analysts, there's a broad consensus on what the Clinton administration should do in January: if needed, stimulate the economy modestly; lock in deficit-reduction measures; and tackle the long-term slump in productivity.

But Van Doorn Ooms isn't sure that consensus exists among politicians. "The politics of deficit reduction are very difficult," says the former chief economist of the House Budget Committee.

Dr. Ooms is director of research at the Committee for Economic Development (CED), a nonpartisan economic policy group of more than 200 business leaders plus two or three dozen university presidents and other educators. The list is impressive.

The CED has just joined the consensus in a report released today saying that fiscal stimulus measures should be limited to those compatible with raising long-term growth.

"We cannot emphasize too strongly our conviction that raising long-term growth must be the nation's top priority," states the report. Slow economic growth for the past 20 years has depressed wages in the United States, eroded living standards, hindered government services, and diminished the United States's ability to compete abroad.

To highlight that point, the report notes that the recent recession cost the nation roughly $220 billion, or $875 per person, annually in lost production and income for several years. But the longer-term slowdown in productivity growth after 1973 costs $1.4 trillion, or $5,400 per person, every year. This cost will continue to increase after the recession is over if nothing is done, warns the report's author, a CED subcommittee headed by Josh Weston, chairman of Automatic Data Processing Inc.

The CED report is already circulating in Congress and the transition team. Clinton advisers may have mixed feelings about its specific recommendations. For one thing, it disapproves of a cut in personal income taxes for the middle class - part of President-elect Clinton's campaign promises.

"The stimulus program should emphasize private and public investments rather than consumption," the report says. A cut in personal taxes would primarily stimulate consumption. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.