All-In Nation Growth Agenda, In or Out?

All-In Nation Growth Agenda, In or Out?
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All-In Nation is a collaboration between the Center for American Progress and PolicyLink, and it is centered on exploring ways to create broad-based economic growth. Their progressive agenda is to lower income inequality by ensuring that barriers and obstacles are eradicated through encouraging more public investment and breaking down employment discrimination through stricter regulation.

Are you in?

Here are three reasons why the U.S. should buy in to All-In Nation’s growth suggestions:

  1. Minimizes income inequality, which is a threat to a stable democracy.

  2. Improves the skill-sets of workers currently not desired by the private sector.

  3. Ensures a more diverse leadership body by rectifying institutional bias through stiffer regulation.

Minimizes income inequality, which is a threat to a stable democracy.  Since 1980, there has been a steady erosion of the middle class as an emphasis on technology has transformed our workforce. It was also during that time that we saw a drastic reform within our tax code, where marginal income tax rates were substantially slashed at the very top from 70% in 1980 to a low of 28% in 1988. While that encourages more investment and higher economic growth, the downside is that it could enrich few and impoverish many. This result has given rise to grassroots movements, such as Occupy Wall Street, that are demanding that wealth be redistributed to the masses. If this goes unaddressed, the basic fundamentals of capitalism could be threatened.

Improves the skill-sets of workers currently not desired by the private sector. Businesses are committed to maximizing profits, and that implies a lesser commitment to investing in individuals with less marketable skills. In those instances, the public sector can fill those gaps through workforce development investments. That could entail more funding to various local Department of Labor locations or grants to local colleges and universities. There are also opportunities for greater collaboration between the public sector and private sector, so that market forces are more aligned.

Ensures a more diverse leadership body by rectifying institutional bias through stiffer regulation. It is human nature to have conscious or subconscious biases when it comes to hiring staff. They can occur through distorted images from media or limited interactions with people of different cultures. When making key hiring decisions, it is often more convenient to rely on an insulated network that is not as diverse. With both instances, we see a management structure that might not be attuned to their market and ignore highly talented prospects. This can be rectified through affirmative action or other legislative acts that force management to broaden their job search scope.

Or are you out? Here are three reasons why the U.S. should pass on All-In Nation:

  1. Compromises future economic growth with taxes rising on more productive assets.

  2. Bureaucrats in Washington are ill-equipped to make decisions that will optimally benefit society.

  3. Discourages incentives by enabling counter-productive behavior.

Compromises future economic growth with taxes rising on more productive assets. The U.S. has accumulated successively higher budget deficits because their spending has outpaced revenues collected. Making investments in infrastructure that cannot be supported with current fiscal conditions will likely worsen future economic prospects. While the U.S. has been fortunate to finance deficit spending without a huge increase in interest rates, this is not a sustainable strategy in the long-term. Rising interest rates will undoubtedly occur in the future, and that will hamper both businesses and consumers ability to access cheap credit.

Bureaucrats in Washington are ill-equipped to make decisions that will optimally benefit society. The danger in placing more control with government is that they are either incapable of adjusting to dynamic market conditions or are more interested in fulfilling their selfish pursuits over more valued needs of society. While the free market system allows market forces to veer to projects that will yield the highest economic benefit to society, yielding control over to bureaucrats might result in funding initiatives where political connections trump overall economic benefits.

Discourages incentives by enabling counter-productive behavior. In an attempt to reduce inequality, many anti-poverty programs are designed to provide financial and food support. Even though this is certainly helpful in the short-run for families falling on tough times, there are inadequate mechanisms in place to encourage people to wean off public support. In fact, there are instances where people opt to stay on public support, even when work is available because they find it more financially beneficial. While that might be helpful in the short-run, their future job marketability is compromised when the length of unemployment continues to rise. Prolonged periods of unemployment end up hurting them more in the future and creates a poverty cycle that is hard to reverse.

Categories: Economics, North America

About Author

Aaron Johnson

Aaron serves as an Assistant Professor of Economics at Darton State College. He holds a M.A. in Economics from the University of Missouri-St. Louis and is a regular contributor on economic analysis for local Fox and NBC news affiliates in Albany, GA.