Stories of uncertainty and instability made economic headlines in 2011, but there may be reason for some optimism heading into 2012 as the economy has picked up some steam in recent months. Brookings Economic Studies experts offer recommendations and insights for what lies ahead in the new year while weighing in on the economic developments that made headlines in the past 12 months, from the euro crisis, tax reform debates and budget deficit stalemates to state and local budget news, the year’s job gains and discussions on social mobility.
After the Lost Budget Opportunities of 2011: What Next?
Alice Rivlin, Senior Fellow
As 2011 ended we should have been celebrating a bipartisan deal to restore the federal government to fiscal sanity. Instead, we are bemoaning the lost opportunities of extreme partisan pig-headedness and hoping that 2012 will bring politicians to their senses before a debt crisis overtakes us. Read more »
Mobility Is a Problem; Now What?
Ron Haskins, Senior Fellow
Federal and state policymakers, program operators and teachers, and parents need to constantly remind themselves and their children that personal responsibility is the key to success and insist that children and adolescents demonstrate more of it. Read more »
The Financial Crisis and the Path of Reform: Three Years Later
Michael Barr, Nonresident Senior Fellow
While the U.S. financial sector has stabilized considerably, and the U.S. economy is growing again, the continued crisis in Europe threatens to halt that progress and choke off recovery. Three years after the peak of the crisis, it makes sense to take stock. Read more »
Children’s Economic Well-Being: 2011
Julia Isaacs, Child and Family Policy Fellow
There is some good news: the number of children with an unemployed parent is lower than a year ago. On the other hand, the number of children receiving food stamps has continued to grow, largely due to increased financial hardship among individuals and families. Read more »
2012: The Year We Import Recession from Europe?
Douglas Elliott, Fellow
There is no one path to disaster that worries me in particular; the problem is that I could literally write out a thousand scenarios where the crisis explodes. It is reminiscent of the problems in the financial crisis in 2008 that were created by excessively complex and inter-connected financial systems. Read more »
Household Deleveraging in 2011: Progress, but More to Come
Karen Dynan, Vice President & Co-Director
There have been indications of real progress toward the necessary strengthening in households’ financial positions. However, we still face significant challenges related to household debt. Read more »
2011: The Year that Income Inequality Captured the Public’s Attention
Isabel Sawhill, Senior Fellow
The majority of Americans do not begrudge the rich their wealth as long as they believe it is deserved. What may be changing is a sense that things have gone too far, that the deck is stacked against those who play by the rules, and that our politics has been corrupted in the process. Read more »
Economic Mobility: Season of our Discontent?
Scott Winship, Fellow
If the left can accept that a problem need not be portrayed as worsening in order to be a priority, while the right can acknowledge that limited upward mobility is incongruent with the nation’s most deeply held values, then perhaps we can reach bipartisan consensus that rejuvenating the American Dream should be a top national priority. Read more »
State and Local Budgets in 2011: The Crisis that Didn’t Happen (Yet?)
Tracy Gordon, Fellow
Given the furor over public pensions and labor compensation in 2011, this could be another year of conflict in state capitols and city halls. Read more »
Another Year of Modest Labor Market Gains
Gary Burtless, Senior Fellow
Until we see a robust improvement in aggregate demand or a major swing in public policy, the bargaining position of American workers is likely to remain weak. Read more »
The Economy in 2011 and Beyond: Bright Spots Amid Dark Clouds
George Perry, Senior Fellow
There are some economic bright spots that suggest the economy’s internal dynamics are quickening. But there are also serious outside risks that challenge policy makers both here and abroad. Read more »
Monetary Policy in 2011: Unconventional and Necessary
Donald Kohn, Senior Fellow
The Federal Reserve saw itself as having scope to do more to help the recovery along, and in August and September it acted. Read more »
The U.S. Economy: Is it Finally Recovering?
Martin Baily, Senior Fellow
The prospects for the U.S. recovery are mixed. There are signs, however, that the recovery is beginning to take hold and the vicious cycle could turn into a more virtuous cycle of rising income, declining unemployment and stronger demand. Read more »
2011 in Review: Lots of Debate on Individual Tax Reform
Robert Pozen, Senior Fellow
To move toward optimal tax reform, both parties must shed some deeply held convictions. President Obama might have to forego his desired rate increases on the wealthy. Read more »
Developments in the Housing Market: 2011
Ted Gayer, Co-Director
Housing was a key contributor to the financial crisis and the ensuing recession, and its continued weakness contributes to our anemic recovery. Read more »
Video Q&A: Is the U.S. Headed for Japanese Style Stagnation?
Barry Bosworth, Senior Fellow
America’s problems are more solvable than Europe’s. But Europe adjusted to slow growth with a generous safety net. The U.S. system only works if you have a job. Watch the video »
Follow updates and discussion on the top economic stories of the year on Twitter through the #TopEcon hashtag.
Rather than serving as a unifying diplomatic exercise to highlight Iran’s troubling regional activities, the [Warsaw] summit primarily highlighted America’s diplomatic isolation from its European allies.