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Daniel Altman's proposal for a tax on wealth over $1 million. He makes the case for taxing wealth not incomes to reduce inequality as this is where the situation in terms of inequality has worsened for the U.S. in recent decades. To support this proposal Altman cites the change in the U.S. Ginni coefficient, which measures inequality. The Ginni coefficient is anumber from 0 to 100 which goes up with higher income inequality. From the late 70's to the 1990's, the Cnesus Bureau showed this to be in the low 40's. By 1992 the Ginni coefficient went up to the mid-70's, according to the Federal Reserve data. It increased to about 80 in 2010. In 1992 the top 10% in the U.S. population controlled 20 times the wealth of the bottom 50%. By 2010 this figure triples to 65 times. and the graduated income tax even if it redistributes a small share of the wealth does little to affect the trend of wealth extremes from building up and threatening the social fabric of America, reducing mobility and opportunities for the bottom 50% to unprecedented levels since the 1950's. ...

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Friedman says Obama's 2012 presidential campaign lacks bold vision, a failure to articulate tangible achievements, and owes too much to campaign consultants. He describes it as being developed in test tube fashion. The failure to embrace and strongly advocate his own presidential commission's Simpson-Bowles deficit reduction plan, which could be coupled with long term investment in the productive potential of the U.S. economy, shows the lack of courage to prepare a plan going forward. It is likely to cost support of independent, center and center-right voters in the 2012 U.S. presidential election.

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David Brooks says the Paul Ryan Budget proposal is a bold step forward that is badly needed in this debate on health care, even though it has some grave weaknesses which need to be corrected. It is a bold step forward because he says Democrats say they want no middle class tax increases, or are not willing to say what kinds of tax increases they support, and yet they believe the Medicare and Medicaid and Social Security programs are worth preserving. This is'nt based on reality. He cites the weaknesses, beginning with the one discussed in David Leonhardt's column in the New York Times on April 7, 2011. Too many Americans pay too little into Medicare taxes and expect to collect several hundred thousand dollars more in Medicare benefits. The example given in Leonhardt's column is from a study that shows 56 year olds with average earnings pay about $140,000 in dedicated Medicare taxes over a lifetime, and then go on to collect $430,000 in benefits. Middle class and affluent boomers can't get off paying their share like everybody else. Its just the right way for their children and the nation's children. Ryan's plan excludes older people reaching retirement in ten years. The other major weakness is that the cuts are too deep. Things like the Pell grants which Ryan proposes to cut back to 2008 levels need to be preserved, and more money has to go into science, education and research and early childhood education for the U.S. to be competitive with China and India. The Ryan proposal places cuts that would be required so that tax revenues need to be at 18% of GDP. The number where a larger consensus exists is for tax revenues at 20% of GDP (also supported by business and the Wall Street Journal's editorial columns). This would preserve programs that are most productive for the economic future of the U.S. Ryan's proposal lets the hope for reducing costs of medical care rest entirely on future retirees deciding how much medical care (tests, procedures etc) they consume through larger cost sharing. Yet a structure and framework is needed to manage these costs effectively, and some combination of incentives to retirees to control costs and an effective structural framework is needed. ...

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Former U.S. Treasury secretary Robert Rubin talks to Charlie Rose about the August 2 Debt Ceiling and Deficit legislation. He says there are two constructive things about the legislation. There are no serious cuts in 2011 and 2012, so there will be almost no loss in demand as spending cuts do not affect the immediate 18 month period. Former Treasury Secretary Summers also makes this point. And that the cuts include defense and non-defense. He favors the approach of the Bowles-Simpson Commission. On the overall situation Rubin points out the importance of getting a real public discussion going about what this means, what the consequences of decisions made now. Especially important for Rubin is public understanding of the importance of setting up a serious deficit reduction program that sets the date of implementation a couple of years into the future to give time to get back on track, and the need for increased revenues. A useful point Rubin makes is that the question of jobs and the question of getting into a sound position fiscally are really the same question. He cites his experience in 1993 when he helped President Clinton setup and implement a deficit reduction program- which had half spending cuts and half revenue increases. Bowles-Simpson Commission recommendations for closing loopholes for tax expenditures and Martin Feldstein's similiar proposal for limiting the deductions and exclusions to 2% of Adjusted Gross Income offer an option that creates revenues without any tax increases....

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Michael Porter who is an authority on competitiveness and national strategy, is a Professor at Harvard University. He last servedin a national economic strategy advisor capacity in 1983, as a member of the President's Commission on Industrial Competitiveness. His view is that the USA badly needs an economic strategy. And the political system of the USA discourages developing such a strategy. The political dialogue also discourages the discussion from focussing on the key aspects of a strategy and because of the ideological slant the discussion between Republicans and Democrats tends to cancel each other out leaving the important work undone. What is an economic strategy? Its thinking clearly what are the advantages or strengths America as a nation has and how best to preserve these advantages in the future? And its thinking clearly about the weaknesses, and how to address the weaknesses, and where money and other resources should be allocated and what actions need to be takento get results. As strategy is a long term thing, it requires patient and perseverent effort and allocation of resources. The strengths he goes on to list are, an unparalleled environment for starting new companies and the science and technology, and the regional universities and clusters of high tech workers and resources in different regions of the country,the educational institutions for higher education, and the committment to competition and free markets, efficient and deep capital markets, and the acceptance of the uncertainty and cost in the huge job churn (restructuring of industry that destroys millions of jobs per year with net positive job creation). The problems that have arisen with these advantages have compromised some of them. Free markets are not really free as anti-trust enforcement has been lax resulting in mergers dominating markets and weakening compeititon. Many times the "free market' talk has become rhetoric and distorted for individual purposes. And regulatory oversight has been weakened in the name of "free markets", as if the market system could be run with no government regulation at all. The weaknesses are: remaining an energy inefficient nation even as countries like Japan have become increasingly and way more energy efficient, and doing nothing about it, not having any policies to fix this and assign a big priority to it. In the area of access to education, which is critically important to national competitiveness, the US ranks poorly in the number of college graduates and in the opportunties for access to college across the middle and working classes. Says Porter, the US ranks 12th in the college or higher educational attainment for 25-34 year olds. And the US he says has made no progress in this area for 30 years. This is a disturbing trend in a economy that must have the education and skills to justify its high wages, and how will Americans compete for jobs that can be moved elsewhere in these circumstances he asks. Strategy requires honesty with ourselves in identifying and addressing the strengths to be preserved and the weaknesses to be fixed. Solutions have to go to the heart of the problem, with the patient effort needed for longer term solutions, when problems have become embedded in the system, and in the habits, culture, and way of doing things, that will produce disaster down the road. Wen it comes to spending on priority investments, Porter prefers to tax rebates the spending that goes into educational assistance and into logistical infrastructure. ...

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U.S. President Lyndon Baines Johnson was committed to spending on a war overseas and domestic priorties for the Great Society program at home. Johnson struggled with Congress to meet the costs of both. He even suggested a 10% tax surcharge to pay for the war and domestic programs. Dallek says 79% of American opposed a tax increase in 1968. Republican Richard Nixon was elected U.S. president that year.

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Rising bond yields for the bonds of Germany, USA and Spain are seen for 2011. The absence of solutions for deficit reduction after the passing of Bush tax cuts in the US, and the debt crisis in Europe, create a situation with the potential for sovereign shocks in 2011.

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There are similarities in the Republican and Democratic party platforms in 2016. One area of agreement is in the reinstatement of Glass Steagall Act. That legislation made in the Depression period to separate commercial banking from investment banking was changed  when president Clinton made changes in a deal with Senators Phil Gramm and Jim Leach in 1999. The too big to fail problems of banks and the problems of investment banks during the 2008 financial crisis are attributed to the lack of Glass Steagall protections for financial stability and safety. The result is that in the post 2016 environment banks can expect a tougher regulatory environment. Another are is in trade where both parties are expected to take tougher positions to protect U.S. interests. The Republican platform calls for "better negotiated trade agreemets that put America first."

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Some of the crude rhetoric at Donald Trump rallies, and use of coarse language, according to the NYT. Working class and older Americans show their anger at a system that appears to have left them behind with slogans, stickers, T-Shirts. The idea of the wall figures in much of this and shows that the wall has become not jut about Mexico but a metaphor that captures this anger, that reflects this anger. Another aspect of the 2016 campaign is that those most vulnerable and most in need of help have not sought the comfort of knowing about programs to improve middle class and working class wages, incomes, to build infrastructure, create jobs, stop companies from shifting jobs overseas, plans for improving accesss to health care and education, to ask for specifics and delivery. This is the supreme irony of the 2016 election campaign that not enough attention is going to what will be done for the middle and working class, and what specifics will be delivered, in what time frame- which is essential for restoring the condition of the American middle and working class to where it was in the 2 decades after the Second World War. ...

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U.S. President Richard Nixon adopted Keynesian policies to boost the economy after tightening monetary policy failed in 1970. In 1971 Nixon turned to higher fiscal spending to get the economy closer to full employment. He also adopted wage and price controls. By 1972 the economy had recovered, inflation was at 5.7% and unemployment at 4.9%, and Nixon won re-election. This was the only recovery in an election year since World War II. In international affairs Nixon's policy was to leave the Bretton Woods system and floating the dollar. With a new administration in 1974 inflation surged to 11% and unemployment to 5.6%, because wage and price controls worked only for a short period.

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Charlie Rose talks to Paul Ryan, the Republican Congressman from Wisconsin on his "Roadmap for the Future" and a major overhaul of taxes, spending, Medicare and Social Security. He tells Rose, who hosts a news show on Bloomberg TV, that in 2010 he is all by himself looking at the big picture for shaping ideas on economic reform, and still hopes others will join him in this effort.

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Senator Schumer calls it a "momentous 24 hours here in the US Congress, a legislative one two punch that you rarely see." Schumer negotiated a major climate change action bill for $369 billion in the Senate, that also covers tax changes to cover costs, and helps cut drug and health care expenses of Americans. The second quarter shows healthy job gains of average 375,000 a month and unemployment at 3.6%. The economy declined by 1.1% but much of this was from a slowdown in home and business construction sectors sensitive to higher interest rates and from higher inventory. Consumer spending increased by 1% during the quarter. The Fed's series of 0.75 percentage points interest rate increases had softened inflation expectations before they get entrenched in the economy. This makes it possible for Democrats to present a message to ordinary Americans that president Biden is getting things done with 2 legislative achievements. A $280 billion bill for investment in the semiconductor industry in the US. And a huge win on climate change with the $269 billion Schumer is negotiating in the US Congress. It is the opposite of what Republicans are saying is Biden's failure to tackle inflation. Appropriately Biden and Schumer are calling this the bill the Inflation Reduction Act of 2022. How did Schumer get this done? After the Ukraine war and EU decision to shut down Russian oil supplies, cut oil and gas use by 15%, and the climate change action inducing fires and floods, there is increasing awareness about climate change action as vital for our future all over the world. This gives more confidence to Democrats to negotiate a temporary continuation of oil and gas, with increased exports of US LNG to Europe. Senator Manchin from an energy producing state of West Virginia was brought over to Schumer's side with this idea. What Biden gets is a 40% reduction of US carbon emissions over 2005 levels, enough to get within reach of the 50% he promised at COP26 in Glasgow. It is a win-win for all sides and for the American people, and shows that patience and hard work, and persistence in the face of adversity can bring results. ...

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New rules by the Government Accounting Standards Board (GASB) and Moody's would show U.S. public pension funds as about 57% funded instead of 75% funded under earlier rules. This will open up an even wider gap in how much they have in the funds and their promises to retirees to about an estimated $2.2 trillion. This puts pressure on state and local governments to either reduce benefits for new hires, have workers increase contributions, or set aside more money from the budget. Local governments face the risk of credit downgrades and higher borrowing costs if no action is taken and finances are worsening. An example is Illinois retired teachers who earn annual pensions of about $46,000 on average, and do not participate in Social Security under state opt-out. Even under old accounting rules this pension fund had $37 billion of assets and $81 in future liabilities. Under the new rules the unfunded liabilities could jump to 83% by one estimate, from over 50%.

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Ip's point about the actions of previous president's in promoting a recovery long after they are in office has to be qualified by the uncertain economic outlook for 2013, with a slowdown in the eurozone, China and India, and the efforts to control the deficit in the U.S. also affecting the economic outlook. The process of deleveraging has still to work itself out and the economy is still being supported by the Fed's continual easing of monetary policy.

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The Fiscal Survey of States, a report put out by the National Governor's Association, says that Medicaid will become an increasing burden on state budgets as help from the federal government declines. The report points out that state general fund revenue remains $21 billion below 2008 levels, just as the states prepare for less federal help.

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CNN reporter Cassie Spodak provides this exceptional report into the minds of New Hampshire Democratic voters who gave Bernie Sanders a 22 percent lead in the New Hampshire Democratic primary over Hillary Clinton. In October 2016 Hillary Clinton has the support of Bernie Sanders against Donald Trump in the U.S. presidential election. She described it as "100 percent support" in television debate. Sanders has appeared with Clinton twice, and campaigned 4 times in New Hampshire, and continually across the country. Younger New Hampshire voters still long for Sanders as their favored candidate. Older voters and some who have been motivated by Sanders to run for local office see the shaping of the Democratic Party platform as a victory for Sanders. Key planks of Sanders, taxes on the wealthy and higher incomes to pay for student tuition, infrastructure, and helping working class families, are now key parts of the Democratic platform. These voters see this as a pragmatic step and are enthusiastic in their support for Hillary Clinton. Overall Clinton now has 87 percent of Democratic voter support in New Hampshire according to a WMUR/UNH poll in mid October 2016, and she is doing well with millenials and independents nationally, a critical bloc of voters for Clinton to show nationwide support. One member of the steering committee for Sanders in New Hampshire named Dudley Dudley, reflects the opinion that has shifted the party to emerge united during and even more so in the final months of the presidential campaign of 2016- she tells the CNN reporter Spodak that she supports Hillary because "of the way she has grown, and stretched," and the way Clinton and Sanders are now campaigning together and working together. Both Clinton and Sanders deserve credit for their extraordinary ability to grow during their campaigns and during the party's way to shape the way forward. ...