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Washington’s latest fiscal confrontation has already caused a partial shutdown of the federal government and threatens a breach of the federal debt limit. What are the economic, political, and fiscal consequences of hitting the debt limit?
The details of the president's tax proposals are not out yet. The most interesting proposal appears to be the increase in the EITC for workers without children. The current law credit is tiny and few workers without kids qualify. The proposal would double the rate of the credit and increase the income level at which it phases out, helping many more workers. It would also make it available to workers ages 21 - 24 or 65-66, who are currently ineligible. Evidence suggests that it would encourage labor force participation, especially for very low income single people without kids and there's some bipartisan support. Marco Rubio has endorsed the concept.
Jason Furman and CEA have nice paper on the proposal.
It seems like a pretty radical notion to do away with some or all of our safety net and instead guarantee every single American adult an annual income just for…being alive. But the idea is gaining popularity across the ideological spectrum. Does it have any real merit?
I think this question can takes us in at least 2 directions. One is to explore the levels of poverty for various groups today -- and the growing evidence of the damage caused. The second is to assess the performance of policies designed to address poverty -- whether by reducing the incidence or by ameliorating the harmful effects. I hope we keep these strands of discussion - and possibly others - clearly distinct.
A growing body of research evidence finds that housing and neighborhoods can either block or expand people's access to opportunities for upward mobility. What changes to federal housing policies could promote economic mobility?
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