Public Agenda Issue Guide: Economy

Citizens

are confronted with serious issues every minute of the day. Grasping the underlying issues from the headlines is a difficult task. Give us ten minutes a day and we will help bring clarity to the chaos of the news, policy and issues.

ON THE AGENDA

Increase in Test Taking, Not Marred by Typical Decrease in Score

Paul Gasbarra
Aug 27, 2008

According to two articles today, SAT scores remained flat this year. A graph in the Wall Street Journal’s coverage illustrates that this news comes after two years of decline from a peak reached in 2005. While WSJ’s headline “Class of ’08 Fails…” sets a dour scene, the people who run the test are actually encouraged by the results.

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How Important Is The Sticker Price?

Paul Gasbarra
Aug 22, 2008

A couple of interesting items have come up in the past few days on the cost of college as well as the pay off that college provides to its graduates. The Associated Press revealed the results of a report by the Sallie Mae foundation, which showed that when looking for a college, 40 percent of families don’t limit their school searches based on cost.

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ISSUE GUIDE: Economy

OVERVIEW

The Economy

In 2008, surveys show Americans are deeply dissatisfied with the state of the economy, more so than they've been for years. And that's not surprising, given the two major economic events of the year: record gas prices of more than $4 per gallon, and a mortgage crisis that has shaken the financial world. Economists still debate whether the economy is actually in a recession, but both developments touch people in very direct ways.

The Federal Reserve, the nation's central bank, is predicting sluggish economic growth of 1.6 percent for 2008. Inflation and joblessness have been increasing, however, and most financial experts say the economic malaise is likely to continue into 2009.

When it comes to economic policy, there are usually two different strands to the public debate. One is how to deal with the current situation; the other is which long-term policies are needed to keep the country prosperous. Recessions come and go, and the government can take short-term steps to make them less severe. Long-term policy addresses the big trends, and what will bring prosperity for most Americans.

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CONSIDER THE CHOICES

Use the free market and free trade to create jobs

Secure and improve American jobs

Educate workers to compete in the global economy

The free market system is the most effective way to provide jobs and higher wages. Americans believe in rewarding effort, letting people work hard and get rich if they can.Government policy should reflect those values and the first principle should be to stay out of the way of business. Its private industry that creates jobs, not government, and government should encourage business by low taxes, minimal regulation and international free trade. Thats the best way to promote growth, and sustained growth will generate new jobs,higher wages and salaries, and a higher standard of living for most Americans. Yes, there are ups and downs in the economy, and people will lose jobs during recessions, but in the long run we always gain them back.
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The way things are now, the rich are getting the lions share of the benefits of economic growth. But most of the labor force the people who run the machines,provide services, clean offices,and keep the economy going day to day are not sharing in the gains. Worse, theyre at constan risk of being downsized out of their jobs, or being forced to work longer hours to cover for downsized coworkers. Thats a big reason why the gap between rich and poor has widened in the last couple of decades. Because of globalization, were allowing American jobs to go overseas.Because of a focus on short-term gain and high stock returns, were encouraging corporations to pay lower wages and cut benefits. The measure of the economy shouldnt be stock prices it should be whether we have enough good jobs so that all Americans can earn a decent living.
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We cant stop the global economy from changing, nor should we globalization brings a lot of benefits. But we should better prepare workers to adapt to it. We need to educate workers so they can constantly be learning new skills, constantly coming up with new ideas. Any job might be lost because of technological changes, foreign competition, or a recession. Thats why so few Americans keep one career for a lifetime any more. But too many people dont have the chance to keep up. Millions of children from low-income families attend second-rate schools. And the soaring cost of higher education has kept adults from changing careers. Whats needed is an expanded effort to improve Americas schools and to provide opportunities for older workers to reinvent themselves.
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