Seven years of NAFTA
An evaluation of the North American Free Trade Agreement on its seventh anniversary finds a continent-wide pattern of stagnant worker incomes, lost job opportunities, increased insecurity, and rising inequality, according to EPI’s Briefing Paper NAFTA at Seven, which contains reports written by economic analysts from the United States, Mexico, and Canada. For more information, read the full report or the press release as well as an online supplement to the report that details NAFTA’s impact on jobs by industry in each of the 50 states.
Bush plan’s tax cuts and their consequences
If the President’s $1.6 trillion tax cut is passed in Congress, many important federal programs would face major budget shortfalls by 2011, the year the tax cut would be fully phased in, relative to the Democratic budget alternative. For a comparison of the Democratic and Republican budget proposals, read the Briefing Paper Competing Spending Priorities, which details the consequences for various programs. The follow up Briefing Paper, Tax Cuts and Consequences, compares the Bush budget proposal to the CBO’s baseline projections adjusted for inflation and population growth over the next 10 years.
Economists oppose Bush cuts, support stimulus
Over 100 prominent economists (including eight Nobel laureates) representing diverse views on economic issues have endorsed a statement opposing the large tax cuts proposed by President Bush, and have instead called for a one-time tax cut, or “dividend,” to boost the economy. Read the press release and download the full statement online.
Bush’s fuzzy surpluses
Relying on a Congressional Budget Office projection of a $5.6 trillion budget surplus, President Bush has proposed an aggressive $1.6 trillion tax cut as if the surplus had already filled the treasury’s coffers. The CBO projections, though, are problematic because they are just that — rough guesses of what will happen in a hard-to-know future. The consequences of the tax cuts, on the other hand, are not at all uncertain. Such cuts are permanent changes in the tax code and mean permanent reductions in government revenue. For a better idea why it’s too risky to base tax cuts on CBO’s 10-year projections, read Bush’s Fuzzy Surpluses online.
Declare a prosperity dividend
President Bush has proposed a tax cut that would go mostly to the already wealthy, but a better way to stimulate the economy would be to use part of the current budget surplus to declare a “prosperity dividend.” The proposal is explained in EPI’s Issue Briefs, Declare a Prosperity Dividend — A stimulating idea for the U.S. economy and States Win Too with Prosperity Dividend. An even more detailed analysis can be found in the EPI Briefing Paper, The Case for a Prosperity Dividend.
Early warning signs on jobs, wages
Despite the sharp slowdown in growth in GDP in the last quarter of 2000, the overall unemployment rate remained at 4.0%. Yet there is already some evidence that the slowing economy might be threatening the gains made by many workers. A full analysis can be found online in EPI’s latest Quarterly Wage and Employment Series (QWES).
Trust funds’ rainy day postponed, again
The annual reports of the trustees of Social Security and Medicare continue to show improvements in the 75-year outlook for both programs. But the future would look even brighter if the trustees would abandon their unrealistic, overly pessimistic economic assumptions. For a full analysis of the trustees’ reports, check out EPI’s Issue Brief, Trust Funds’ Rainy Day Postponed, Again. Also available online is a press release, “Budget Surplus Would Be $1.5 Trillion Lower Using 10-Year Forecast of Social Security, Instead of CBO.”