Subject: Economic policy to help the poor (AEI Economics Ledger) If you have trouble reading this message

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Spotlight on giving
NEW RESEARCH — The Great Recession, tax policy, and the future of giving in America. Arthur Brooks: “A great deal of research has studied the effects of income and tax changes on charitable giving. However, little work has focused on these relationships in the wake of the Great Recession. . . . I find the tax increases to have a moderately stimulative impact on giving, but predict the deduction cap will have a large negative impact.” EVENT RECAP! Give till it hurts?: The Great Recession, tax policy, and the future of charity in America

Economic policy to help the poor
A better solution than raising the minimum wage. James Pethokoukis: “If Americans think the 1.6 million workers making the federal minimum need a raise to, say, $10 an hour, have government make up the $2.75 gap. It would basically be a de facto expansion and broadening of the Earned Income Tax Credit, an anti-poverty fighting tool with bipartisan support.” Staggering unemployment among teenagers. Harvey Golub: “More than one in seven between age 16 and 24 can't find any job, full or part-time. For African Americans in that age group, it's more than one in four. These bleak statistics actually understate the tragedy.” What to make of the pope’s remarks on capitalism. James Pethokoukis: “Pope Francis offers his sharp challenge in the wake of a deep global recession whose aftermath continues to plague advanced economies. At the same time, globalization and technology have created both amazing wealth and growing inequality within nations around the world.”

Pro-growth reforms
How to grow the economy. Edward Conard: “It has finally dawned on left-leaning economists like Paul Krugman and Larry Summers that the U.S. economy is not suffering from a temporary lull in demand but rather from a structural problem that yields slower growth from a permanently lower base. If this economic outlook is correct, and there is plenty of evidence that it is, there is little reason for Keynesian stimulus, which sacrifices long-term growth to avoid permanent damage from a temporary lull in demand.” GOP must lead on free trade. Claude Barfield: “US sovereignty and congressional prerogatives are not threatened by TPA or the proposed new trade agreements. Thus, Republicans should get on with the job of reaffirming their traditional commitment to open markets and vigorous international competition.”

Are we safe yet?

Get ready for the next housing bubble. Peter Wallison: “Since these two governmentsponsored enterprises [Fannie Mae and Freddie Mac] became insolvent in September 2008, FHFA has also been their conservator, with the power to control their operations and policies. Mr. Watt is a good man, but he is a man of the left, and he will use his control of Fannie and Freddie to return to the policies that brought on the mortgage meltdown in 2007 and the financial crisis in 2008.” Reducing the impact of too big to fail. Phillip Swagel: “Three important changes made since the financial crisis affect the funding costs of large banks in a way that suggests a reduced government subsidy and a move toward a level playing field with institutions that are not viewed as too big to fail.” The fatal flaw of housing reform. Peter Wallison: “Once the government is in control of the market, it will see to it that just about everyone who wants to buy a home will be able to get the credit to buy one. Unlike disparate impact, the concept has nothing to do with minority status; it appears to be simply an entitlement.”

In other news
The next Obamacare mirage. Thomas Miller and Abby McCloskey: “To argue that the Affordable Care Act has been and will be a key driver of slower health-care spending is irreconcilable with the most basic facts about such spending over the last decade, as well as with the judgment of the executive branch's own team of actuaries responsible for health-care accounting and future projections.” Climate change keeps changing. Benjamin Zycher: “Confronted with more data that contradict climate change orthodoxy, climate change alarmists still advocate a carbon tax, but with new rationales.” Remember that IRS tea party scandal? Stan Veuger. “The tea party movement had, after all, had a major impact on an election just a few months before it became subject to the tax service's targeting.”

Mark your calendar
12.10 AEI Event: Opening markets, unlocking opportunity: Senator Jeff Flake on trade promotion in Congress 12.11 AEI Event: Strife in the fast lane: How to solve America’s $1.7 trillion transportation problem 12.12 Jobless claims released 12.12 Retail sales data released 12.12 AEI Event: Do sports stadiums need government welfare? 12.12 AEI Event: Should the communications industry be regulated by the FCC?

Keep up with AEIecon
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