1. A great hearing in the House Ways and Means subcommittee on Human Resources on how taxes and welfare discourage work. The star witness is Duncan Smith, Secretary of State for work and pensions in the UK, who describes recent reforms to their income support system. The other witnesses are great too, including Gene Steuerle (of the Urban Institute), who talks a lot about implicit marginal tax rates associated with the phase-out of these programs, and Jared Bernstein talking about the success in incentivizing work and the importance of demand side policies. Bernstein makes an important point - the marginal tax rates you hear about are very real, but the increased labor supply that studies of these programs pick up already account for the marginal rate disincentive. He agrees with Gene we should reduce those marginal rates when we can, but they don't negate the value of the program.
2. Richard Layard has put out a "Manifesto of Economic Sense" with Paul Krugman. This is a good example of good-citizen economists.
Thursday, June 28, 2012
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I watched the hearing. It was appalling. The purpose was solely to justify ending any support for people so that the Republicans can claim that they have eliminated the "cliff."
ReplyDeleteThere is only one solution for the cliff---policies that raise wages.