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1912. Can Rich Countries Afford to Grow Old?
- Author:
- Gary Burtless
- Publication Date:
- 07-2005
- Content Type:
- Working Paper
- Institution:
- The Brookings Institution
- Abstract:
- Observers in many industrialized countries believe population aging represents a serious economic threat. Increases in the percentage of the population past retirement age may impose unsustainable burdens on future workers. Either taxes or government debt will have to rise substantially to pay for old-age income support. This paper considers the extent of these burdens and corrects the widespread impression that the burdens are unsupportable. Population aging means that contributions needed to support the retired elderly must rise. But this extra burden will be at least partly offset by a reduced need to support the dependent young, who will become relatively less numerous. The extra burden of an aging population would be smaller still if labor force participation rates among the working-age and elderly populations increased. Indeed, employment rates among the nonaged have risen in nearly all the industrialized countries as a growing percentage of women has entered the work force. Many countries, including the United States, have adopted policies to encourage work among people past the traditional retirement age.
- Topic:
- Conflict Prevention, International Relations, Economics, Government, and Population
- Political Geography:
- United States
1913. Deficits, Interest Rates, and the User Cost of Capital: A Reconsideration of the Effects of Tax Policy on Investment
- Author:
- William G. Gale and Peter R. Orszag
- Publication Date:
- 07-2005
- Content Type:
- Working Paper
- Institution:
- The Brookings Institution
- Abstract:
- Under traditional formulations, lower capital income tax rates reduce the user cost of capital and stimulate investment. The traditional approach, however, implictly or explicitly considers a revenue-neutral reduction in capital income taxation. We extend the traditional approach by considering a reduction in taxes that generates an increase in the budget deficit; the expanded budget deficit raises interest rates and the opportunity cost of investment. This provides a mechanism through which tax cuts can raise the cost of capital. Representative calculations show that, even with relatively modest interest rate effects, the net effect of making the Administration's recent tax cuts permanent or a 10-percent reduction in individual income tax rates would be to raise the user cost of capital. Thus, sustained tax cuts can raise the cost of capital and reduce investment.
- Topic:
- Development, Economics, and Government
- Political Geography:
- United States
1914. Articulating a Policy Framework for Long-Term Federal Entitlement Reform
- Author:
- James C. Capretta
- Publication Date:
- 07-2005
- Content Type:
- Working Paper
- Institution:
- The Brookings Institution
- Abstract:
- President Bush's top first-term objectives—in the aftermath of the 9/11 terrorist attacks—were waging and winning the global war on terror, significantly enhancing our homeland security systems, and strengthening economic growth.1 With sluggish economic growth following the 2001 recession persisting in 2002 and 2003—due, in part, to the revelation of several corporate governance scandals and the aftermath of technology stock "bubble burst"—the President placed a high premium on tax relief proposals aimed at accelerating the pace of short and long-term economic growth. In this context, it is not at all surprising that large federal budget deficits emerged.
- Topic:
- Security, Economics, and Government
- Political Geography:
- United States
1915. Restoring Fiscal Sanity 2005: Meeting the Long-Run Challenge
- Author:
- Alice M. Rivlin and Isabel B. Sawhill
- Publication Date:
- 04-2005
- Content Type:
- Working Paper
- Institution:
- The Brookings Institution
- Abstract:
- Sometimes good news poses hard choices. Over the next several decades Americans will be forced to make difficult decisions necessitated by the good news that people are living longer and that medical care has become far more effective (albeit more expensive) than ever in history. These choices will require adjustments by almost everyone—families, communities, employers, and older people themselves—but they will be most starkly evident in the federal budget.
- Topic:
- Development, Economics, Government, and Human Welfare
1916. Block Grants: Flexibility vs. Stability in Social Services
- Author:
- Margy Waller
- Publication Date:
- 12-2005
- Content Type:
- Policy Brief
- Institution:
- The Brookings Institution
- Abstract:
- Since the 1940s, federal officials, commissions, and scholars all have suggested that local governments receive their federal funds in the form of so-called block grants. Supporters say block grant sallow local governments more freedom to design programs, simplify administration of funds, and improve consumer access to social services. The biggest challenge to wholesale support for block grants is simple: How can we ensure accountability for spending and outcomes? Policymakers face a dilemma: keep block grant funding flexible to ensure its success or protect programs from potential cuts that threaten the stability of services. This policy brief reviews the history of federal block grants for social services, the academic literature examining block grant outcomes, and recent federal proposals.
- Topic:
- Development, Economics, Government, and Human Welfare
1917. Why Federalism Matters
- Author:
- Pietro S. Nivola
- Publication Date:
- 10-2005
- Content Type:
- Policy Brief
- Institution:
- The Brookings Institution
- Abstract:
- What do we want from federalism?” asked the late Martin Diamond in a famous essay written thirty years ago. His answer was that federalism—a political system permitting a large measure of regional selfrule—presumably gives the rulers and the ruled a “school of their citizenship,” “a preserver of their liberties,” and “a vehicle for flexible response to their problems.” These features, broadly construed, are said to reduce conflict between diverse communities, even as a federated polity affords inter-jurisdictional competition that encourages innovations and constrains the overall growth of government.
- Topic:
- Development, Government, and Politics
- Political Geography:
- United States
1918. The Well-Being of Single-Mother Families After Welfare Reform
- Author:
- Bruce D. Meyer and James X. Sullivan
- Publication Date:
- 08-2005
- Content Type:
- Policy Brief
- Institution:
- The Brookings Institution
- Abstract:
- Trends in income and consumption tell very different stories about the well-being of single mothers and their children in recent years. On the one hand, data suggest that income fell noticeably for single mothers well below the poverty line, while income grew significantly for single mothers with higher incomes. On the other hand, data on how much these two groups of mothers and children consumed suggest that the material circumstances of both groups improved during the 1990s. We argue that the consumption data better reflect well-being for several reasons. First, consumption is probably measured with less error than income for poor families, and is more strongly associated with other measures of well-being such as health and housing conditions. Second, there is overwhelming evidence that income is underreported by these mothers and that the underreporting, especially of income from welfare and other transfer programs, has increased in recent years.
- Topic:
- Demographics, Economics, Government, and Human Welfare
1919. Insuring America's Workers in a New Era of Offshoring
- Author:
- Robert E. Litan, Nicholas Warren, and Lael Brainard
- Publication Date:
- 07-2005
- Content Type:
- Policy Brief
- Institution:
- The Brookings Institution
- Abstract:
- With a new wave of white-collar offshoring coming fast on the heels of accelerated job losses in manufacturing, an ever-broader pool of American workers is finding that the nation's safety net has more holes than netting. The nation can and must do more to help insure the livelihoods of American workers in the face of structural shifts of whatever form, while preserving the benefits of an open and innovative economy. With technological change and offshoring accelerating job turnover and the pace at which workers' job-specific skills lose value, the time has come for the federal government to strengthen the existing safety net.
- Topic:
- Economics, Government, and Human Welfare
- Political Geography:
- United States and America
1920. Rumsfeld's Revolution at Defense
- Author:
- Paul C. Light
- Publication Date:
- 07-2005
- Content Type:
- Policy Brief
- Institution:
- The Brookings Institution
- Abstract:
- Whatever his legacy as an architect of the war in Iraq, Defense Secretary Donald Rumsfeld has already earned a place in American bureaucratic history as one of its most ambitious organizational reformers. Rumsfeld is determined to complete a top-to-bottom overhaul of his department before he leaves office. Rumsfeld may be one of history's most ambitious reformers, but his actual impact is far from assured. He still faces intense resistance from the armed services, especially the Army, which has the most to lose in the movement to a much lighter military. And many of his proposals are either still under consideration in Congress or only in the early stages of implementation in the department.
- Topic:
- Security, Defense Policy, and Government
- Political Geography:
- Iraq and Middle East