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January 14, 2015

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Latest Posts from Economist's View


'Seven Lessons about Child Poverty'

Posted: 14 Jan 2015 12:24 AM PST

From Clio Chang at The Century Foundation:

Seven Lessons about Child Poverty: Introduction: The official child poverty rate in the United States stands at 20 percent, the second-highest among its developed counterparts, for a total of almost 15 million children. Since the 2008 recession, 1.7 million more kids have fallen into poverty, according to UNICEF's relative measure of poverty.
Compared to other age groups, a much higher share of Americans aged 0 to 18 are impoverished.
Let that sink in for a minute.
Why are we allowing so many Americans to start their lives in poverty, knowing that it likely will do them significant long-term damage, as well as limit our growth as a nation? It is a blow to our nation's dedication to equal opportunity.
That question is especially perplexing because relatively simple, proven approaches would address some of the worst impacts of child poverty. What follows are seven lessons drawn from The Century Foundation's Bernard L. Schwartz Rediscovering Government Initiative conference last June, Inequality Begins at Birth, that would help us tackle gaps in our public policy, as part of the Initiative's equal opportunity agenda. The lessons are as follows:
  1. The Stress of Childhood Poverty Is Costly for the Brain and Bank Accounts
  2. Child Poverty Is Not Distributed Equally
  3. The Power of Parental Education
  4. Higher Minimum Wage Is a Minimum Requirement
  5. Workplaces Need to Recognize Parenthood
  6. Government Works
  7. Cash Allowances Are Effective
Lesson 1: The Stress of Childhood Poverty Is Costly for the Brain and Bank Accounts ...

Links for 01-14-15

Posted: 14 Jan 2015 12:06 AM PST

Full Employment Alone Won’t Solve Problem of Stagnating Wages

Posted: 13 Jan 2015 08:38 AM PST

I have a new column:

Full Employment Alone Won't Solve Problem of Stagnating Wages: The most recent employment report brought mixed news. The unemployment rate continues its slow but steady downward path and now stands at 5.6 percent, but wages remain flat. In response, most analysts made two points. First, the lack of wage growth indicates that we are not yet close enough to full employment to generate upward pressure on wages, so policymakers should be patient in reversing attempts to stimulate the economy. Second, once we do get closer to full employment the picture for wages will change and the long awaited acceleration in labor compensation will finally materialize. 
I fear this trust that market forces will eventually raise wages will lead to disappointment. ...

'Selective Voodoo'

Posted: 13 Jan 2015 08:37 AM PST

Paul Krugman:

Selective Voodoo: House Republicans have passed a measure demanding that the Congressional Budget Office use "dynamic scoring" in its revenue projections — taking into account the supposed positive growth effects of tax cuts. It remains to be seen how much damage this rule will actually cause. The reality is that there is no evidence for the large effects that are central to right-wing ideology, so the question is whether CBO will be forced to accept supply-side fantasies.
Meanwhile, one thing is fairly certain: CBO won't be applying dynamic scoring to the positive effects of government spending, even though there's a lot of evidence for such effects.
A good piece in yesterday's Upshot reports on a recent study of the effects of Medicaid for children; it shows that children who received the aid were not just healthier but more productive as adults, and as a result paid more taxes. So Medicaid for kids may largely if not completely pay for itself. It's a good guess that the Affordable Care Act, by expanding Medicaid and in general by ensuring that more families have adequate health care, will similarly generate significant extra growth and revenue in the long run. Do you think the GOP will be interested in revising down estimates of the cost of Obamacare to reflect these effects? ...

'Estimated Social Cost of Climate Change Not Accurate'

Posted: 13 Jan 2015 08:36 AM PST

Climagte change may be more costly than we thought:

Estimated social cost of climate change not accurate, Stanford scientists say: The economic damage caused by a ton of carbon dioxide emissions - often referred to as the "social cost" of carbon - could actually be six times higher than the value that the United States now uses to guide current energy regulations, and possibly future mitigation policies, Stanford scientists say.
A recent U.S. government study concluded, based on the results of three widely used economic impact models, that an additional ton of carbon dioxide emitted in 2015 would cause $37 worth of economic damages. These damages are expected to take various forms, including decreased agricultural yields, harm to human health and lower worker productivity, all related to climate change.
But according to a new study, published online this week in the journal Nature Climate Change, the actual cost could be much higher. "We estimate that the social cost of carbon is not $37 per ton, as previously estimated, but $220 per ton," ...

See also: New economic model may radically boost the social cost of carbon - Ars Technica.

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