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Mon, 24 Aug 2009 00:00:00 GMT
Facing the most severe recession since the 1930s, the U.S. government has pursued an aggressive countercyclical fiscal policy, which is striking given the consensus a decade ago against the use of discretionary fiscal policy as a stabilization tool. In this new paper, William Gale and Alan J. Auerbach consider the evidence on the effects of discretionary fiscal policy, beginning with how the practice of this policy has changed over time.
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Thu, 28 May 2009 00:00:00 GMT
U.S. Treasury Secretary Timothy Geithner's first trip to China will feature a range of discussions about global economic issues and the U.S.-China economic relationship. Eswar Prasad outlines some of the critical agenda items and the broader challenges facing these two closely intertwined economies.
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Mon, 30 Mar 2009 00:00:00 GMT
Robert Litan discusses the Treasury’s six part plan for significantly reducing systemic risk in the financial system. He says the six elements in the Treasury plan, if enacted into law, should significantly reduce the likelihood of single or multiple failures of systemically important financial institutions in the future, as well as the losses to taxpayers for protecting their creditors.
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Mon, 23 Mar 2009 00:00:00 GMT
Treasury Secretary Timothy Geithner’s plan announced on Monday to move some $1 trillion in toxic assets off of the balance sheets of the banks helps remove the uncertainty from the financial system although it will not fix the credit crisis on its own, according to Douglas Elliott. Strong concerns remain about whether the Public Private Investment Program (PPIP) will succeed—the program could either fizzle or prove to be too expensive for the taxpayer—but there are also some grounds for hope.
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Tue, 03 Mar 2009 00:00:00 GMT
The administration’s new “stress tests” for the 19 largest banks will likely result in substantial new infusions of government money to bolster their capital. Douglas Elliott explains what “capital” is; how to measure whether a bank has enough of it; and what the stress test and capital proposals are. He applauds these actions as “right on virtually all counts.”
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Tue, 10 Feb 2009 00:00:00 GMT
Doug Elliott critiques the Obama administration’s new rescue plan for the banking sector announced on February 10, saying he agrees on the need for significant new capital injections, despite their political unpopularity, but argues that it is not at all clear that the proposed “bad bank” could be designed in a way that would make it better than simply guaranteeing toxic assets on the books of the banks. Elliott writes that the devil will indeed be in the details of the construction of the bad bank and the pricing mechanisms.
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Fri, 23 Jan 2009 00:00:00 GMT
The Treasury’s Troubled Asset Relief Program (TARP) has been widely described as a “$700 billion bailout” but Douglas Elliott points out that it will cost a lot less in reality. A recent CBO report suggests the actual cost may only be a quarter of the amount committed. We must use accurate cost estimates, using methods like CBO’s, to make the best decisions about the commitment to save our financial system, which programs are funded, and how we execute the rescues.
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Thu, 08 Jan 2009 13:30:00 GMT
Event Information:
- January 08, 2009, 1:30 PM to 3:00 PM
On January 8, the Brookings Institution hosted Assistant Secretary of the Treasury Neel Kashkari for an update on recent actions related to the Treasury Department’s $700 billion financial stability program. Full event audio is available for download.
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Thu, 18 Dec 2008 00:00:00 GMT
William Galston examines what’s wrong with our current political institutions, given the current financial crisis and lack of coherent governance, and proposes how to create a better government.
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Thu, 11 Dec 2008 00:00:00 GMT
The economy is the number one concern in the minds of main street Americans. The $700 billion bailout package was aimed at rebuilding financial institutions, but it is now up to the new president to restore confidence in consumers and workers.
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Tue, 09 Dec 2008 00:00:00 GMT
Sarah Binder and Mark Spindel suggest that Congress should amend the $700 billion Troubled Assets Relief Program in several ways, including a rewrite of the conditions put on institutions that take TARP dollars. It is not too late to fix the mistakes made in the rush to enactment, they write.
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Fri, 05 Dec 2008 08:45:00 GMT
Event Information:
- December 05, 2008, 8:45 AM to 4:30 PM
A new administration presents an ideal opportunity to reshape the nation’s tax code. Improving the equity, simplicity and efficiency of the tax system will help to better prepare taxpayers, businesses and the economy for the challenges that lay ahead. Brookings, the Urban-Brookings Tax Policy Center and Tax Analysts co-hosted a forum to explore timely policy recommendations for the incoming president and his transition team.
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Fri, 07 Nov 2008 17:07:14 GMT
President-elect Obama held his first press conference today, focusing on the economy. Kling commented on Obama’s address saying the nation needs two rounds of stimulus to kick-start the economy—the first to stem recent job losses and help homeowners, and then to focus on longer-term growth.
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Thu, 06 Nov 2008 00:00:00 GMT
Today, too many Americans are not fully sharing in our nation’s prosperity. Real median wages have stagnated, income inequality has increased, and changes in the economy that have brought benefits have also brought new risks and insecurities. In response to these challenges, our nation needs to act now on three fronts. First, our nation must make the right long-term investments to promote economic growth that is both strong and sustainable. Second, it is necessary to put in place economic policies that will better achieve broad-based participation in that growth. Third, for growth to be sustainable, it is necessary to restore sound fiscal policy, moving on a multiyear path to a sustainable fiscal position. This paper elaborates on these economic challenges.
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Tue, 21 Oct 2008 00:00:00 GMT
In testimony before the House Committee on Financial Services, Alice Rivlin says that pundits have pronounced the death of capitalism prematurely, saying it is far too powerful a tool for increasing human economic well-being to be tossed aside. She believes there is plenty of blame to go around for the current crisis, and lays out steps to fix regulatory gaps, eliminate perverse and conflicting incentives and clarify and strengthen the roles of the current regulatory agencies.
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Mon, 20 Oct 2008 00:00:00 GMT
In testimony before the House Budget Committee, Martin Baily says we need a second fiscal stimulus package to avoid a deep recession. He advocates for an immediate infusion of $200 billion, with a second $100 billion released if unemployment hits 7.5 percent. The package should include help for homeowners, tax rebates for families and aid to states and localities.
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Fri, 10 Oct 2008 00:00:00 GMT
As President-Elect Obama prepares to lead the United States, what are the top global economic challenges facing the new president and his advisors and how should the new administration address them? A new report by Brookings global economic and development experts ranks the top 10 issues and details specific ideas for how to tackle the toughest challenges.
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Fri, 10 Oct 2008 00:00:00 GMT
With fears of a global recession pounding markets worldwide, many are watching closely to see if the U.S. Treasury can quickly implement the recent bailout package in a way that stabilizes the financial markets and unfreezes credit. Brookings experts Martin Baily and Robert Litan take a look at the Treasury Department’s chances of success and argue that the omens thus far are “not encouraging."
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Mon, 06 Oct 2008 00:00:00 GMT
The financial rescue package has been signed into law, but what happens now? Sarah Binder has been watching this story develop, and discusses her thoughts on The Federal Drive with Tom Temin and Jane Norris.
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Mon, 06 Oct 2008 00:00:00 GMT
In advance of the annual meetings of the World Bank and the IMF in Washington, Lex Rieffel asserts that both institutions, which were created in 1944 to be at the center of a sound and dynamic international financial system, have overlapping responsibilities and antiquated governance structures that have undermined their legitimacy. In this policy brief, Rieffel offers steps to visibly differentiate the two institutions and improve their effectiveness, including moving the headquarters of the World Bank to Europe.
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Mon, 06 Oct 2008 00:00:00 GMT
As part of our ongoing series covering the financial crisis, Martin Baily, director of IBPP delivered a presentation at the NABE Meeting on October 6, 2008 on the cause of the current financial crisis and the domino effect that permeated the financial markets, and provided measures to be implemented to prevent another financial institution meltdown.
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Thu, 02 Oct 2008 00:00:00 GMT
Despite the urging of President George W. Bush and congressional leaders, the all-out push for a $700 billion bailout for the nation’s beleaguered banks ended in failure on September 29. Even though party leaders called on their members to cast votes for the nation’s financial welfare, legislators responded by casting votes for their own electoral safety, writes Sarah Binder and Mark Spindel in an opinion that examines why the bill failed.
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Wed, 01 Oct 2008 10:00:00 GMT
Event Information:
- October 01, 2008, 10:00 AM to 12:00 PM
Days of uncertainty on Capitol Hill finished with an economic rescue package, quickly signed by the president. Brookings economic, budget and congressional experts gathered mid-week to discuss the $700 billion question. Alice Rivlin said the bailout package will be successful if it gets credit flowing again. Others expressed concerns about whether the oversight in the legislation would be effective.
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Fri, 26 Sep 2008 14:43:48 GMT
Policy-makers spent a long weekend hashing out details on legislation that would provide up to $700 billion to purchase Wall Street assets, new oversight authority and more foreclosure prevention. Former Federal Reserve Vice Chair Alice Rivlin explains how mortgage securities unraveled, how the deal makers prevailed and what this will mean for the next administration.
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Tue, 23 Sep 2008 00:00:00 GMT
Given the slew of questions that have been raised about the $700 billion bailout of Wall Street firms, Congress is right to reject open-ended grants of power at untold cost, writes Sarah Binder. But, if Congress fails to grant new powers to the Treasury, it risks deepening—and being blamed for—the greatest financial crisis since the Depression. Binder offers basic ground rules on how Congress should proceed.
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Mon, 22 Sep 2008 00:00:00 GMT
Martin Baily and Robert Litan analyze the long-term implications of recent and proposed government efforts to stabilize the markets and the economy at large. As Congress considers legislation this week, Baily and Litan stress the importance of understanding how and why the dominoes fell, and most important, they advocate important systemic fixes: transparency, institutional liquidity and better oversight and tools given to regulators.
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Fri, 19 Sep 2008 00:00:00 GMT
Tumult in financial markets continues to rattle the nation and spur government response. Douglas Elmendorf offers his analysis on how government funds might be best injected into the crisis-ridden economy. He weighs several approaches, from buying mortgage-related debt and other troubled securities to investing in a wide range of financial institutions.
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Wed, 17 Sep 2008 00:00:00 GMT
In the wake of the federal bailouts of Bear Stearns, Fannie Mae, Freddie Mac and AIG—yet no lifeline for Lehman Brothers—serious institutional questions have arisen about the government’s role in the overall economy and where Uncle Sam draws the line. Robert Litan examines the ever-changing situation and whether these actions have changed the face of capitalism as Americans know it.
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Mon, 08 Sep 2008 00:00:00 GMT
Douglas Elmendorf offers his views on the federal government's plan, announced on September 7, to take control of troubled mortgage lenders Fannie Mae and Freddie Mac. He says "it ensures that the government has full control over the enterprises so that long-run decisions about our system of housing finance can be made in the best interest of society as a whole."
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Mon, 08 Sep 2008 13:50:36 GMT
The Treasury Department’s decision to place Fannie Mae and Freddie Mac in a conservatorship could signal a turning point in the credit crisis that has troubled investment banks for nearly a year. Brookings fellow and former OMB Deputy Director Alice Rivlin examines the impact and the importance of the action.
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Sun, 31 Aug 2008 00:00:00 GMT
The need for U.S. economic leadership continues despite a global financial crisis, and new and emerging economic powers. But while the need for U.S. leadership in the global economy is clear, the capacity is less so. In a paper prepared for the Aspen Strategy Group in August 2008, Lael Brainard and David Lipton explore the changing context for US international economic leadership, review economic goals, and discuss the adequacy of the instruments available for pursuing those goals.
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Fri, 08 Aug 2008 00:00:00 GMT
After dramatic declines in concentrated poverty in the 1990s, the number of low-income workers and families living in high-working-poverty neighborhoods rose by a striking 41% in the first half of this decade, according to a new report from the Brookings Metropolitan Policy Program. The report's authors draw on data from the IRS to measure the change in rates of “concentrated working poverty” nationally and in many of the largest metropolitan areas across the country.
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Fri, 18 Jul 2008 00:00:00 GMT
Recent government efforts to shore up Fannie Mae and Freddie Mac reveal the ambivalence of Americans towards whether these mortgage giants should be more like private corporations or public utilities. Alice Rivlin suggests that, if taxpayers put credit on the line and take the risk of losing, they should also be allowed to share in the gains. She suggests at least partial government ownership and public appointees to the Board.
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Mon, 09 Jun 2008 08:15:00 GMT
Event Information:
- June 09, 2008, 8:15 AM to 6:00 PM
On June 9, 2008, Brookings convened more than 70 stakeholders for a conference on “Climate Change, Trade and Competitiveness.” The conference was led by Lael Brainard and focused on how climate change presents a new set of challenges for the world trading system and potential strategies to mitigate future conflicts.
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Fri, 16 May 2008 00:00:00 GMT
With the U.S. financial system still in a perilous state, Martin Baily, Doug Elmendorf and Bob Litan diagnose what caused the crisis and offer prescriptions for policy change. The authors of this new Brookings paper address two challenges: to resolve the immediate problems and to reduce the likelihood that these problems recur.
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Thu, 15 May 2008 00:00:00 GMT
Tax incentives for employer-sponsored insurance and other medical spending cost about $200 billion annually and have pervasive effects on coverage and costs. In this paper, Jason Furman surveys a range of proposals to reform health care, either by adding new tax incentives or by limiting or replacing the existing tax incentives.
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Thu, 15 May 2008 00:00:00 GMT
Stimulus checks are a bright note in this year’s tax season. But, William Gale asserts, the annual tax-filing ritual is otherwise complicated and outdated. He recommends that the presidential candidates advocate changes like streamlining tax incentives and allowing some taxpayers to pay without filing returns.
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Tue, 13 May 2008 00:00:00 GMT
Taxpayers are overwhelmed by complexity, real and imagined, in the tax code. Testifying before the Senate Finance Committee, William Gale said that, although the need to simplify the tax system is one goal that everyone accepts, every year the system becomes more complex.
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Tue, 26 Feb 2008 00:00:00 GMT
Alice M. Rivlin testified before Congress on the current economic situation and what policy makers can do to curb a possible future recession. "The Federal Reserve has used the tools in its limited arsenal aggressively and imaginatively and clearly indicated its intention do more if necessary," she said.
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Thu, 10 Jan 2008 00:00:00 GMT
Congressional leaders are now discussing the shape of an economic stimulus bill, while President Bush prepares to unveil his own plan. In a new Hamilton Project paper, Jason Furman and Doug Elmendorf explain why tax or spending changes that are timely, targeted and temporary may be a useful complement to further monetary stimulus because they can boost economic activity more quickly.
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Wed, 15 Aug 2007 00:00:00 GMT
Americans are deeply concerned about paying their mounting bills for health care. This is true whether they have public (Medicare or Medicaid) or private insurance. And it’s certainly true for the 46 million people with no insurance at all. At the same time, the federal government’s health spending is clearly unsustainable. If current commitments are kept, other government services will have to be slashed or taxes increased drastically just to pay for Medicare and Medicaid.
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Sun, 01 Jul 2007 00:00:00 GMT
Paper by Jason Furman and Robert E. Rubin (July 2007)
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Fri, 01 Jun 2007 00:00:00 GMT
The progressive tax system, and the nation's fiscal system more broadly, have historically played an important role in expanding opportunities for all Americans while reducing inequality. But the same dynamic forces of technological change, financial innovation, and globalization that have contributed to rising income inequality also present new challenges for progressive taxation.
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Wed, 28 Feb 2007 00:00:00 GMT
China’s growth in economic and military power has presented both challenges and opportunities to U.S.-China relations and to the global economy. In an Opportunity 08 paper, Lael Brainard and Wing Thye Woo examine five elements to a successful approach to trade with China.
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Wed, 28 Feb 2007 00:00:00 GMT
Although the nation's poverty rate is higher now than it was in the 1970s, no President since Lyndon Johnson has made fighting poverty a major plank of his campaign or goal of his administration. With large and growing gaps between the rich and the poor, it is now time for presidential campaigns and the next President to focus on poverty and inequality in America.
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Wed, 28 Feb 2007 00:00:00 GMT
A good tax system raises the revenues needed to finance government spending in a manner that is as simple, equitable, stable, and conducive to economic growth as possible. But the challenge for the next President will be to make reform work not just in the abstract, but in the real world, where special interests often rule the roost. The next President should support reforms that would tax all income once (only) at the full tax rate, simplify and streamline the tax code, and, of course, raise sufficient revenues.
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Wed, 28 Feb 2007 00:00:00 GMT
The past 25 years have brought a dramatic shift in our nation's pension system away from defined benefit plans and toward defined contribution accounts, such as 401(k)s and Individual Retirement Accounts (IRAs). But many of our public policies have not been updated to reflect the increased responsibility placed on workers to prepare for their own retirement. The next President can improve and strengthen retirement security substantially through a series of common-sense reforms that would make the defined contribution pension system easier to navigate and more rewarding for American families.