Saturday, January 11, 2014

A Conservative Economist Has Some Suggestions To Advance The War On Poverty

Glenn Hubbard was an economics adviser to George Bush and to the Mitt Romney campaign.  He offers some suggestions for dealing with poverty that are worth considering.  He argues, correctly I believe, that policies that expand employment should be employed in addition to the provision of public support programs.  He proposes a subsidy to encourage human capital formation and an extension of the earned income tax credit to families without children.  He also has some ideas about tax reform that might help to pay for the programs that he advocates.  His tax reforms may be used with or without benefit reductions in Social Security and Medicare benefits.

Some of his ideas, such as the use of vouchers to encourage investment in human capital, have the proper intent if not the best approach to the problem of human capital formation.  He advocates higher marginal tax rates on wages, but not on investment income.  That is at least a start in the direction of a more progressive tax system.  In any case, Hubbard's proposals are better than those that are coming from Republicans in Congress.  We also need programs that will increase employment.  They have been is short supply from Democrats as well as from Republicans.

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