Combined Blockfile.Pdf

Total Page:16

File Type:pdf, Size:1020Kb

Combined Blockfile.Pdf Combined Blockfile AFF 3 A2: UBI Benefits 3 A2: Increased Wages 3 A2: Bargaining Power 3 A2: Small Businesses 4 A2: Innovation 5 A2: Increasing Investment 5 A2: Economic Freedom 5 A2: Gender Inequality 6 A2: Education 6 A2: Automation Error! Bookmark not defined. A2: Reducing Income Inequality 6 A2: Increased Productivity 7 A2: Welfare Problems 9 A2: Bureaucracy 9 A2: Inefficient 9 A2: Debt Burden 9 A2: Dependency 9 A2: Poverty Trap 9 A2: Funding Links 11 A2: VAT 11 A2: Carbon Tax 11 A2: Capital Gains Tax 11 A2: Welfare Exclusion 12 A2: Queer Exclusion 12 A2: Racial Exclusion 12 A2: Deflation / Japanification 12 NEG 14 A2: UBI Harms 14 A2: Inflation 16 A2: Socialism 16 A2: Redistributing Wealth 16 A2: Increasing Unemployment 16 A2: Exclusion 17 A2: Single-Parent Households 17 A2: Immigrants 17 A2: Elderly 18 A2: Women 18 A2: Handicapped 18 A2: Welfare Benefits 18 A2: Automatic Stabilizer 18 A2: Specific Programs 18 A2: Medicaid 19 A2: Pell Grants 20 A2: SNAP 20 A2: Job Training Programs 20 A2: EITC 21 A2: Housing Vouchers 21 A2: Funding Links 22 A2: Debt 22 A2: VAT 23 A2: Carbon Tax 23 A2: Capital Gains Tax 23 A2: Counter-Advocacy 23 A2: Doing Both 23 A2: Private UBI 23 A2: Miscellaneous 23 AT: Basic Income Not Enough to Survive 23 A2: Emerging Markets 24 A2: Currency Depreciation 24 A2: Interest Rate Spill Over 24 A2: EM Default Risks 24 Turkey Collapse 25 Argentina Collapse 25 A2: Debt Harms 25 A2: Fiscal Stimulus 26 A2: Interest Payments Crowd-out 27 A2: Political Trade-offs Error! Bookmark not defined. A2: Immigration 28 A2 AFF A2: UBI Benefits A2: Coverage 1. Immigration DA. Fischer ‘18 of the GGI explains that a UBI creates a two-tiered economy between those in the country who receive a UBI and immigrants in the country who do not. This excludes the 13 million non-citizen legal immigrants leaving them in desperate poverty. It Commented [1]: CIS worsens over time as the CIS explains that 1.1 million immigrants enter the country every year. 2. Even if welfare doesn’t cover everyone. It has a much larger impact on each person that receives it. Cowan ‘19 of the CIS: the benefits from a UBI substantially lower than what someone would recieve from welfare. A single mother with 4 children would receive $52,000 under welfare while she would only receive $10,000 under a UBI. 3. Child poverty. Since a UBI only goes to adults over 18, families with children get far less money than families under MTW, as MTW scales up with more kids. 4. Even if not everyone is on welfare at this exact moment, the Center for American Progress finds that 70% of Americans fall back on means-tested welfare at some time in their lives. A2: Increased Wages 1. Mogstad 19’ tells us that the UBI would be a band-aid solution of giving cash instead of enhancing skills or increasing bargaining power. He furthers that wage subsidies, such as the EITC- which the UBI would replace in the AFF world, are far more effective in raising the takehome pay of low-wage workers, encouraging women to participate in the workforce, and increasing productivity and equity properties. A2: Bargaining Power 1. Defense/Turn. A UBI only allows workers to refuse jobs if they can survive off of a UBI as their only income. They won’t be able to because Greenstein ‘19 of CBPP writes that because the right will only agree to funding a UBI with welfare, a UBI would amount to $1,600 a year. In fact, Commented [2]: don't read this part if running this would reduce the poor’s bargaining power because Henderson ‘19 of Stanford University debt/deficit harms finds that the mean welfare package is $20,000 a year. Indeed, Coote ‘19 of PSI writes that a UBI will actually normalize low pay and precarious work because it effectively subsidizes employers who pay low wages by providing a financial cushion for their workers who won’t need as much income once a UBI is passed. 2. Impact Turn. Saab ‘19 of the Jade Institute: If you buy that a UBI is a replacement for work, it would be like an unlimited strike fund - workers could literally go on strike whenever they want, which would be disastrous for businesses as 1) they would be forced to keep increasing wages at the whim of workers and 2) it would destroy all certainty for businesses. This would cause widespread capital flight from America as businesses would move to other countries, thus crashing the economy. A2: Small Businesses 1. Non-uq. Seamans ‘17 of Forbes explains that the US economy already has safety nets for entrepreneurs like unemployment insurance. A UBI wouldn’t further stimulate entrepreneurship because it would just be replacing these safety nets. Indeed, Ehrenfreund ‘15 of Forbes writes that benefit programs like food stamps increase entrepreneurship by allowing people to be risky with the rest of their income because they know that they will always have food. 2. Defense. Mitchell ‘16 of ISLR explains that small businesses can’t thrive in the current economic status of the US because unprecedented levels of market concentration have spread to every corner of the economy. Big business actively underprice and beat out their small business opponents, which is why small business creation has fallen to a historic low. For example, Neumark ‘05 of NBER explains that Walmart destroys local businesses by offering lower prices that small businesses can’t compete with, finding that Walmart destroys 3 jobs for every 2 jobs it creates and decreases wages by 1.5% in towns. 3. Defense. Hedreen ‘19 of Business explains that a UBI leads to complacency, meaning that if there’s free money going around, there’s no incentive to create small businesses or even innovate. Necessity is the mother of invention: no need to make a business means no new businesses 4. Turn. Seamans ‘17 of Forbes gives two reasons why a UBI will hurt entrepreneurship. a. TURN: Heightened risk taking by entrepreneurs means that the capital provided by a financier is at a greater risk of loss. As a result, financiers will cut back on the lending provided to start a new business. b. TURN: As a result of increased risk taking for small businesses, financiers can have trouble distinguishing between high and low risk projects, so they’ll just cut funding all together 5. Porter: oversupply of capital in the economy, the reason why business creation 40-year low is because of monopolies that outcompete small businesses. 2 implications: a. They won’t solve that root problem b. Mitchell explains that a UBI would only make the problem worse as the large proportion of benefits would go to large corporations which then lobby congress for preferential treatment to continue to outcompete small businesses. i. This outweighs any short-term increase in jobs: because in the long run, once they gain full control of markets, they raise prices of goods, completely destroying any benefits of growth. 6. Shiener explains that the economy is currently at full employment. 2 implications a. It turns their argument/Shiener: if we stimulate demand any further, it would cause massive overheating of the economy, where demand far outpaces supply since businesses can't find people to work, they can’t increase supply, and driving prices rise up causing an economic recession. i. Or at the very least, offsets any purchasing power from a UBI. b. It delinks their argument/CNBC explains that we have over 7 million open jobs and creating more jobs wouldn’t be beneficial. Commented [3]: get ev from kev A2: Risk Taking not in blockfile 1. Seaman: insurance policies like unemployment insurance, and bankruptcy laws already exists 2. Freund: welfare is already a safety net – empirically increased entrepreneurship by 36%. 3. UBI actually decreases entrepreneurship. a. Seaman: a UBI encourages much more risky investment, banks raise interest rates on loans to compensate. And because bank can no longer distinguish between high- and low-quality risky projects, they stop loaning completely. Historically happened with bankruptcy laws. A2: Innovation A2: Increasing Investment A2: Economic Freedom A2: Domestic Violence 1. Ingrao ‘14 of Simmons University: Poverty is one of the primary factors that impacts the likelihood of domestic violence, as poverty is directly linked to increased rates of aggressive behavior that leads to abuse. This means whoever best solves poverty also best solves the root cause of domestic violence. 2. Turn. Pavanelli ‘19 of PSI finds in a study of the UBI’s impact on gender inequality, in developed countries, that the UBI intensifies a gendered division of labour, trapping women in domestic roles and severely limiting their opportunities. 3. NNEDV ‘17: 99% of domestic violence cases also include financial abuse a. A UBI for a victim in a domestic violence case would just be taken and misused by the abuser 4. NCADV: 7 other reasons why people don’t leave abusive relationships that are UNRELATED to finances: a. The fear that the abuser will become more violent after attempting to leave b. The fear of losing custody of children c. They don’t have anywhere to go (no friends or family to help) d. Religious and cultural beliefs e. The belief that a 2-parent household is better for raising children, even if it is abusive f. Societal reinforcement that “saving” a relationship at all costs is worth it g. The rationalization that the abuser’s actions are caused by stress, alcohol, and work- related issues A2: Education 1.
Recommended publications
  • Unemployment Insurance and Macroeconomic Stabilization
    153 Unemployment Insurance and Macroeconomic Stabilization Gabriel Chodorow-Reich, Harvard University and the National Bureau of Economic Research John Coglianese, Board of Governors of the Federal Reserve System Abstract Unemployment insurance (UI) provides an important cushion for workers who lose their jobs. In addition, UI may act as a macroeconomic stabilizer during recessions. This chapter examines UI’s macroeconomic stabilization role, considering both the regular UI program which provides benefits to short-term unemployed workers as well as automatic and emergency extensions of benefits that cover long-term unemployed workers. We make a number of analytic points concerning the macroeconomic stabilization role of UI. First, recipiency rates in the regular UI program are quite low. Second, the automatic component of benefit extensions, Extended Benefits (EB), has played almost no role historically in providing timely, countercyclical stimulus while emergency programs are subject to implementation lags. Additionally, except during an exceptionally high and sustained period of unemployment, large UI extensions have limited scope to act as macroeconomic stabilizers even if they were made automatic because relatively few individuals reach long-term unemployment. Finally, the output effects from increasing the benefit amount for short-term unemployed are constrained by estimated consumption responses of below 1. We propose five changes to the UI system that would increase UI benefits during recessions and improve the macroeconomic stabilization role: (I) Expand eligibility and encourage take-up of regular UI benefits. (II) Make EB fully federally financed. (III) Remove look-back provisions from EB triggers that make automatic extensions turn off during periods of prolonged unemployment. (IV) Add additional automatic extensions to increase benefits during periods of extremely high unemployment.
    [Show full text]
  • Optimal Automatic Stabilizers⇤
    Optimal Automatic Stabilizers⇤ Alisdair McKay Ricardo Reis Boston University Columbia University and London School of Economics June 2016 Abstract Should the generosity of unemployment benefits and the progressivity of income taxes de- pend on the presence of business cycles? This paper proposes a tractable model where there is a role for social insurance against uninsurable shocks to income and unemployment, as well as inefficient business cycles driven by aggregate shocks through matching frictions and nominal rigidities. We derive an augmented Baily-Chetty formula showing that the optimal generosity and progressivity depend on a macroeconomic stabilization term. Using a series of analytical examples, we show that this term typically pushes for an increase in generosity and progressivity as long as slack is more responsive to social programs in recessions. A calibration to the U.S. economy shows that taking concerns for macroeconomic stabilization into account raises the optimal unemployment benefits replacement rate by 13 percentage points but has a negligible impact on the optimal progressivity of the income tax. More generally, the role of social insur- ance programs as automatic stabilizers a↵ects their optimal design. JEL codes: E62, H21, H30. Keywords: Counter-cyclical fiscal policy; Redistribution; Distortionary taxes. ⇤Contact: [email protected] and [email protected]. First draft: February 2015. We are grateful to Ralph Luetticke, Pascal Michaillat, Vincent Sterk, and seminar participants at the SED 2015, the AEA 2016, the Bank of England, Brandeis, Columbia, FRB Atlanta, LSE, Stanford, Stockholm School of Economics, UCSD, the 2016 Konstanz Seminar on Monetary Policy, and the Boston Macro Juniors Meeting for useful comments.
    [Show full text]
  • Optimal Automatic Stabilizers∗
    Optimal Automatic Stabilizers∗ Alisdair McKay Ricardo Reis Boston University Columbia University and London School of Economics June 2016 Abstract Should the generosity of unemployment benefits and the progressivity of income taxes de- pend on the presence of business cycles? This paper proposes a tractable model where there is a role for social insurance against uninsurable shocks to income and unemployment, as well as inefficient business cycles driven by aggregate shocks through matching frictions and nominal rigidities. We derive an augmented Baily-Chetty formula showing that the optimal generosity and progressivity depend on a macroeconomic stabilization term. Using a series of analytical examples, we show that this term typically pushes for an increase in generosity and progressivity as long as slack is more responsive to social programs in recessions. A calibration to the U.S. economy shows that taking concerns for macroeconomic stabilization into account raises the optimal unemployment benefits replacement rate by 13 percentage points but has a negligible impact on the optimal progressivity of the income tax. More generally, the role of social insur- ance programs as automatic stabilizers affects their optimal design. JEL codes: E62, H21, H30. Keywords: Counter-cyclical fiscal policy; Redistribution; Distortionary taxes. ∗Contact: [email protected] and [email protected]. First draft: February 2015. We are grateful to Ralph Luetticke, Pascal Michaillat, Vincent Sterk, and seminar participants at the SED 2015, the AEA 2016, the Bank of England, Brandeis, Columbia, FRB Atlanta, LSE, Stanford, Stockholm School of Economics, UCSD, the 2016 Konstanz Seminar on Monetary Policy, and the Boston Macro Juniors Meeting for useful comments.
    [Show full text]
  • Investment Perspective IS MODERN MONETARY THEORY a PANACEA OR a TRAP?
    Investment Perspective IS MODERN MONETARY THEORY A PANACEA OR A TRAP? Richard Chauvin, CFA Investment Director July 24, 2019 INVESTMENT PERSPECTIVE – IS MODERN MONETARY THEORY A PANACEA OR A TRAP? 2 Is Modern Monetary Theory MMT Explained a Panacea or a Trap? MMT is an unorthodox way of examining the monetary policy framework of sovereign nations, which leads to the startling You may have heard the term “Modern Monetary conclusion that they are not constrained by their revenues when Theory” (MMT) recently in the financial media or in it comes to setting spending levels. You read that correctly. According to MMT, sovereign nations do not need to collect taxes political discussions. If not, it is likely you will in the or issue debt securities for spending. Instead, they can print as months ahead. Investors should pay close attention to much money as they need because they are the monopoly issuers these discussions. Why? Because progressive politicians of their own currency. MMT challenges beliefs about the nature of money and the importance of budget deficits. MMT advocates say are embracing it as a means of increasing social mainstream beliefs about money, taxes and debt are holdovers spending without imposing taxes. To its advocates, MMT from the gold standard, and are inaccurate and unnecessary.1 also offers the promise of reducing or reversing the Advocates for MMT, such as Professor Stephanie Kelton of Stony contribution to income inequality and wealth inequality Brook College, who is one of its leading proponents, describe it as of current conventional monetary policy. However, looking at monetary and treasury operations through a different lens.
    [Show full text]
  • HBC DHE 10-16-19 Final
    Testimony on Strengthening Our Fiscal Toolkit: Policy Options to Improve Economic Resiliency Douglas Holtz-Eakin, President* American Action Forum October 16, 2019 * *The views expressed here are my own and do not represent the position of the American Action Forum. I am indebted to my colleague Gordon Gray for many valuable conversations. Chairman Yarmuth, Ranking Member Womack, and Members of the Committee thank you for the privilege of appearing today to discuss the important issue of economic resiliency. In this short testimony I hope to convey three main points: • The U.S. economy already displays considerable resiliency; despite significant headwinds there is no imminent recession and growth continues at a solid pace. • The best way to improve economic resiliency is the fortify the long-run, trend rate of economic growth. Negative shocks are an economic fact of life; the faster the economy is growing the less like that it falls into negative territory. • While the logic of automatic stabilizers is impeccable, there are good reasons to be cautious about a dramatic expansion of federal mandatory spending and reasons to be skeptical about the political economy of their effectiveness. Let me discuss these in turn. The Near-Term Economic Outlook The near-term outlook is for solid but slowing growth; and far from an imminent recession. Measured as growth from the same quarter one year ago, growth in real gross domestic product (GDP) accelerated steadily from its recent low of 1.3 percent in the 2nd quarter of 2016 to 3.2 percent in the 2nd quarter of 2018. Since that time, growth has slowed appreciably reaching 2.3 percent in the 2nd quarter of this year.
    [Show full text]
  • Optimal Automatic Stabilizers∗
    Optimal Automatic Stabilizers∗ Alisdair McKay Ricardo Reis Federal Reserve Bank of Minneapolis London School of Economics June 2020 Abstract Should the generosity of unemployment benefits and the progressivity of income taxes depend on the presence of business cycles? This paper proposes a tractable model where there is a role for social insurance against uninsurable shocks to income and unemployment, as well as business cycles that are inefficient due to the presence of matching frictions and nominal rigidities. We derive an augmented Baily-Chetty formula showing that the optimal generosity of the social insurance system depends on a macroeconomic stabilization term. This term pushes for an increase in generosity when the level of economic activity is more responsive to social programs in recessions than in booms. A calibration to the U.S. economy shows that taking concerns for macroeconomic stabilization into account substantially raises the optimal unemployment insurance replacement rate, but has a negligible impact on the optimal progressivity of the income tax. More generally, the role of social insurance programs as automatic stabilizers affects their optimal design. JEL codes: E62, H21, H30. Keywords: Counter-cyclical fiscal policy; Redistribution; Distortionary taxes. ∗We are grateful to Ralph Luetticke, Pascal Michaillat, and Vincent Sterk for insightful discussions, and to the editor, referees and many seminar participants for useful comments. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System. This work has received funding from the European Union's Horizon 2020 research and innovation programme, INFL, under grant number No.
    [Show full text]
  • The Automatic Stablizing Effects of Social Security and 401(K) Plans
    SCHWARTZ CENTER FOR ECONOMIC POLICY ANALYSIS THE NEW SCHOOL WORKING PAPER 2011-2 The Automatic Stabilizing Eects of Social Security and 401(k) Plans Teresa Ghilarducci, Joelle Saad-Lessler and Eloy Fisher Schwartz Center for Economic Policy Analysis Department of Economics The New School for Social Research 6 East 16th Street, New York, NY 10003 www.economicpolicyresearch.org Support for this research provided by The Rockefeller Foundation Suggested Citation: Ghilarducci, Teresa, Saad-Lessler, Joelle and Fisher, Eloy (2011) “The Automatic Stablizing Eects of Social Security and DECEMBER 401(k) Plans.” Schwartz Center for Economic Policy Analysis and Department of Economics, The New School for Social Research, Working Paper Series. Published in 2011 Cambridge Journal of Economics Abstract This study assesses the role of Social Security (OASI) and Social Security Disability Insurance, 401(k) plans, unemployment insurance, Medicare, and the federal income tax system in moderating the business cycle in the United States. Using Instrumental Variable (IV) estimation, we demonstrate that 401(k) plans exhibit a destabilizing influence in the economy. In contrast, Social Security, especially the Old-Age Survivors Insurance (OASI) program, reacts counter-cyclically and therefore has a positive effect on macroeconomic stabilization. Comparing the automatic stabilization properties of Social Security and 401(k) with those of conventional stabilizers – federal income tax, unemployment insurance, disability, and Medicare 401(k) -- reveals that 401(k) accounts reduce the automatic stabilization properties of these government programs by up to 20%. Policy makers must consider this unintended macroeconomic effect before expanding individual financial accounts for the purpose of funding retirement income. 2 1.
    [Show full text]
  • Automatic Stabilization and Discretionary Fiscal Policy in the Financial Crisis
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Dolls, Mathias; Fuest, Clemens; Peichl, Andreas Article Automatic stabilization and discretionary fiscal policy in the financial crisis IZA Journal of Labor Policy Provided in Cooperation with: IZA – Institute of Labor Economics Suggested Citation: Dolls, Mathias; Fuest, Clemens; Peichl, Andreas (2012) : Automatic stabilization and discretionary fiscal policy in the financial crisis, IZA Journal of Labor Policy, ISSN 2193-9004, Springer, Heidelberg, Vol. 1, pp. 1-19, http://dx.doi.org/10.1186/2193-9004-1-4 This Version is available at: http://hdl.handle.net/10419/92340 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. http://creativecommons.org/licenses/by/2.0/ www.econstor.eu Dolls et al.
    [Show full text]
  • Optimal Automatic Stabilizers∗
    Optimal Automatic Stabilizers∗ Alisdair McKay Ricardo Reis Federal Reserve Bank of Minneapolis London School of Economics June 2020 Abstract Should the generosity of unemployment benefits and the progressivity of income taxes depend on the presence of business cycles? This paper proposes a tractable model where there is a role for social insurance against uninsurable shocks to income and unemployment, as well as business cycles that are inefficient due to the presence of matching frictions and nominal rigidities. We derive an augmented Baily-Chetty formula showing that the optimal generosity of the social insurance system depends on a macroeconomic stabilization term. This term pushes for an increase in generosity when the level of economic activity is more responsive to social programs in recessions than in booms. A calibration to the U.S. economy shows that taking concerns for macroeconomic stabilization into account substantially raises the optimal unemployment insurance replacement rate, but has a negligible impact on the optimal progressivity of the income tax. More generally, the role of social insurance programs as automatic stabilizers affects their optimal design. JEL codes: E62, H21, H30. Keywords: Counter-cyclical fiscal policy; Redistribution; Distortionary taxes. ∗We are grateful to Ralph Luetticke, Pascal Michaillat, and Vincent Sterk for insightful discussions, and to the editor, referees and many seminar participants for useful comments. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System. This work has received funding from the European Union's Horizon 2020 research and innovation programme, INFL, under grant number No.
    [Show full text]
  • Recession Ready
    SLOWDOWNS IN THE ECONOMY ARE INEVITABLE. BOUSHEY While it may be tempting to rely on Federal Reserve policy as a lone re- sponse to recessions, this would be a mistake; we know that fiscal stim- / ulus is effective. Rather than wait for a crisis to strike before designing NUNN discretionary fiscal policy, we would be better served by preparing in ad- vance. Enacting evidence-based automatic stabilizer proposals before the / SHAMBAUGH next recession will help the next recovery start faster, make job creation stronger, and restore confidence to businesses and households. RECESSION CONTRIBUTORS Heather Boushey, Washington Center for Equitable Growth Gabriel Chodorow-Reich, Harvard University RECESSION READY John Coglianese, Board of Governors of the Federal Reserve System Indivar Dutta-Gupta, Georgetown Center on Poverty and Inequality Matthew Fiedler, USC-Brookings Schaeffer Initiative for Health Policy and the Brookings Institution Jason Furman, Harvard Kennedy School and Peterson Institute for READY International Economics Andrew Haughwout, Federal Reserve Bank of New York Hilary Hoynes, University of California, Berkeley Michael Ng, Hutchins Center on Fiscal and Monetary Policy TO Ryan Nunn, The Hamilton Project and the Brookings Institution Jimmy O’Donnell, The Hamilton Project FISCAL POLICIES Wilson Powell III, Harvard Kennedy School Claudia Sahm, Board of Governors of the Federal Reserve System THE AMERICAN ECONOMY Jay Shambaugh, The Hamilton Project, the Brookings Institution, STABILIZE and The George Washington University Ocial
    [Show full text]
  • Strengthening SNAP As an Automatic Stabilizer
    217 Strengthening SNAP as an Automatic Stabilizer Hilary Hoynes, University of California–Berkeley and the National Bureau of Economic Research Diane Whitmore Schanzenbach, Northwestern University, the National Bureau of Economic Research, and the Brookings Institution Abstract The Supplemental Nutrition Assistance Program (SNAP) is among the most efficient and effective spending programs. It plays a crucial role in alleviating families’ temporary economic hardships and enabling them to purchase food. In addition, it also rapidly responds to economic downturns by quickly enrolling those who become eligible for benefits due to temporary income losses. Consequently, SNAP funds are spent rapidly in local communities, contributing to their effectiveness as a fiscal stimulus. In this chapter, we propose two reforms that build on the basic structure of eligibility expansions and benefit-level increases that made SNAP an effective automatic stabilizer during the Great Recession. First, we propose limiting or eliminating SNAP work requirements. Second, we propose a 15 percent increase in SNAP benefits during recessions. We also caution against policy options including expanded work requirements and a SNAP block grant, both of which would diminish program efficacy and utility as a stimulus. Introduction The Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, is the nation’s most important food support program. Because it is universally available to eligible participants, SNAP reaches a broad range of poor and near-poor individuals, including the elderly, disabled, families with children, caregivers, workers, and the unemployed. During a typical month in 2018, SNAP helped 40 million people—about one out of every eight Americans—afford the food they need.
    [Show full text]
  • Modern Monetary Theory Meets Greece and Chicago
    Modern Monetary Theory Meets Greece and Chicago George S. Tavlas Economics Working Paper 20122 HOOVER INSTITUTION 434 GALVEZ MALL STANFORD UNIVERSITY STANFORD, CA 94305-6010 November 2020 The Hoover Institution Economics Working Paper Series allows authors to distribute research for discussion and comment among other researchers. Working papers reflect the views of the authors and not the views of the Hoover Institution. Modern Monetary Theory Meets Greece and Chicago George S. Tavlas Economics Working Paper 20122 November 2020 Keywords: Modern Monetary Theory, functional finance, Chicago monetary tradition, monetary uncertainty, monetary rules JEL Codes: B220, E52, H63 George S. Tavlas Bank of Greece Hoover Institution, Stanford University [email protected] Abstract: This paper assesses what has become known as Modern Monetary Theory, or MMT, using Stephanie Kelton’s influential book, The Deficit Myth, as its point of reference. Building on the idea of functional finance, developed by Abba Lerner in the 1940s, the basic premise of MMT is that the size of a nation’s fiscal deficit does not matter for countries that issue their own currency; those countries are able to print money to finance their deficits and backstop their debts. However, the situation is different for countries that have adopted another country’s currency or a regional currency, like the euro. The latter countries, which Kelton calls “currency users” do not have access to a national central bank to backstop their debts. Consequently, these countries are susceptible to financial crises. This circumstance, Kelton argues, was responsible for the recent financial crisis in Greece; that country’s adoption of the euro meant that it was unable to rely on the printing press to backstop its debt.
    [Show full text]