Brookings: Topics - U.S. Economy

Telling the Narrative of the Financial Crisis: Not Just a Housing Bubble

Mon, 23 Nov 2009 00:00:00 GMT

What really caused the great economic crisis of the past year? Should the Fed’s powers be stripped away, per legislation sponsored by Rep. Ron Paul that recently passed the House Financial Services Committee? In an effort to help inform the debate, Brookings Fellow Douglas Elliott and Senior Fellow Martin Baily ponder the importance of public perceptions of the causes of the crisis - and how they will affect chances of financial regulatory reform.

Should Increasing the Progressivity of Entitlement Benefits be Part of a 21st Century American Social Contract?

Mon, 23 Nov 2009 00:00:00 GMT

As the United States begins to recover from the deepest recession in decades, policymakers and the public are increasingly turning their attention to our long-term fiscal problems. To help alleviate the deficit, we need to fix the social contract. William Galston presents evidence which suggests that if done right, strengthening the link between income and net benefits would allow entitlement programs to meet essential social objectives without antagonizing upper-income beneficiaries and undermining cross-class coalitions.

The Senate Votes to Open Debate on Health Care Reform

Mon, 23 Nov 2009 15:15:00 GMT

The Senate voted Saturday night to allow the health care reform debate to proceed to the Senate floor. Senior Fellow Henry Aaron cautions that any legislation to revamp the system must be fiscally responsible and should improve the quality of care. He says lawmakers have many long discussions ahead of them.

Letter to Obama on Health Care Reform

Fri, 20 Nov 2009 00:00:00 GMT

The White House recently released a letter sent to President Obama by a group of more than twenty economists, including two Nobel laureates and five former presidents of the American Economic Association, urging that health reform should include four key measures to rein in health care spending and promote fiscal responsibility.

Rethinking the Way on Infrastructure

Fri, 20 Nov 2009 00:00:00 GMT

With rising concern about the nation’s anemic job numbers, infrastructure has emerged as a centerpiece of a number of proposed “jobs bills.” In a Hill op-ed, Bruce Katz and Robert Puentes point out that infrastructure is not necessarily a cure-all and outline the federal leadership and strategies necessary for successful investment in the way we move goods, people and power.

Should Government Policies Favor Owners Over Renters?

Thu, 19 Nov 2009 00:00:00 GMT

The housing market, thought to finally be stabilizing, took a surprising tumble with new-home starts dropping 10.6% in October from the previous month. Ted Gayer writes that those expecting the recently extended and expanded homebuyer tax credit to improve this situation are likely to be disappointed, and that the credit may be unintentionally weakening the rental market.

Fiscal Challenges Facing Cities: Implications for Economic Recovery

Thu, 19 Nov 2009 09:00:00 GMT

Event Information:

November 19, 2009, 9:00 AM to 11:45 AM

The current economic crisis is not only a national crisis; it is also a metropolitan crisis. And soon the downturn will bring a local government fiscal crisis. On November 19, the Brookings Metropolitan Policy Program and the National League of Cities co-hosted a forum on city fiscal conditions, the responses being undertaken by creative mayors, and the implications for national economic recovery.

Evaluating the Economy and the Possibility of a "Double Dip" Recession

Thu, 19 Nov 2009 14:35:00 GMT

The economy is showing some bright spots, but rising unemployment, weak consumer spending and the housing market continue to be concerns. Robert Litan examines the state of the economy and offers insights into job creation and entrepreneurship, the possibility of a “double dip” recession and higher capital requirements for lending institutions.

The Wealth of Older Americans and the Subprime Debacle

Wed, 18 Nov 2009 00:00:00 GMT

Barry Bosworth and Rosanna Smart explore the consequences of the housing price bubble and its collapse for the wealth of older households, utilizing micro survey data to follow the rise in home values to 2007 and observing which households enjoyed home price appreciation and how they responded in terms of equity withdrawal. The authors conclude that while older households mitigated their real estate and equity losses with relatively stable fixed-value assets and pension programs, they also lost much of their presumed gains relative to earlier cohorts, and they will have less time to recover.

The Scouting Report Web Chat: Metro Areas and the Uneven Economic Recovery

Wed, 18 Nov 2009 00:00:00 GMT

What stands in the way of recovery? On Wednesday, November 18, Alan Berube and Politico Senior Editor David Mark answered questions in a live web chat about how the nation’s large metropolitan areas—including Washington, DC—have fared in the downturn.

The Scouting Report: Metro Areas and the Uneven Economic Recovery

Wed, 18 Nov 2009 12:30:00 GMT

Event Information:

November 18, 2009, 12:30 PM to 1:30 PM

Fiscal Challenges Facing Cities: Implications for Recovery

Wed, 18 Nov 2009 00:00:00 GMT

The current economic crisis is not only a national crisis; it is also a metropolitan crisis; and it will soon become a local government fiscal crisis. In this framing report, Mark Muro and Christopher Hoene assert the importance of local government fiscal conditions to national economic performance, survey current and projected fiscal conditions, review implications for economic recovery, and offer a menu of federal policy options to help minimize city layoffs and service cuts that could harm the economy.

Local Governments to Face Large-Scale Cuts

Tue, 17 Nov 2009 09:12:00 GMT

Despite reports that the economy is recovering from the recession, there will likely be large-scale city government layoffs, deep cuts to local government services and halted or delayed capital projects in the next year or two. Mark Muro, policy director of the Metropolitan Policy program, explains economic cycles and their impact on city and local governments.

Measuring Innovation and Change During Turbulent Economic Times

Tue, 17 Nov 2009 09:30:00 GMT

Event Information:

November 17, 2009, 9:30 AM to 4:00 PM

On November 17, a day-long conference co-sponsored by Brookings and the Heritage Foundation will explore the measurement challenges associated with the recession, particularly in the financial and housing sectors; how innovation can become a standard component of our national accounting system, and how incorporating innovation metrics will aid the development of a unified picture of the sources of growth and economic disruption.

How We're Doing: What's Blocking the Recovery

Sun, 15 Nov 2009 00:00:00 GMT

Despite the economy’s expansion in the last quarter, many American workers still lack jobs, the confidence to spend or a home to call their own. A team of Brookings experts began tracking data early this year to assess various dimensions of national and international well-being. The second quarterly "How We’re Doing" index looks at forces that stand in the way of a strong rebound and asks, "where are we going?"

Can We Build Our Way to Reduced Carbon Emissions?

Fri, 13 Nov 2009 00:00:00 GMT

The Senate Environment and Public Works Committee's climate change bill ignores the demand side of the equation which focuses on changing the built environment—the nations’ buildings and transportation systems, says Christopher Leinberger. He calls for policy that promotes demand mitigation measures so more Americans will use less energy and emit less greenhouse gases where they live, work and recreate.

Karen Dynan and Alan Berube Comment on the Second “How We’re Doing” Index

Thu, 12 Nov 2009 13:39:00 GMT

Despite the economy’s expansion last quarter, many American workers still lack jobs, the confidence to spend money or a home to call their own. Brookings scholars have been tracking data on various dimensions of national and international well-being since early this year. Karen Dynan and Alan Berube examine the findings in the second Brookings “How We’re Doing” Index.

An Awkward Dance: China and the United States

Wed, 11 Nov 2009 00:00:00 GMT

While the economic entanglements between the U.S. and China have increased over the last decade, so has the tension. With President Obama visiting China and other Asian nations, Brookings expert Eswar Prasad and Grace Gu of Cornell University discuss the tightening embrace between the two countries—in terms of flows of goods and services, financial capital and people—and the implications.

The Scouting Report Web Chat: Extending the Homebuyer Tax Credit

Wed, 11 Nov 2009 00:00:00 GMT

On Wednesday, November 11, Ted Gayer and Fred Barbash participated in a live web chat on the extended homebuyer tax credit, debating whether or not President Obama should have let it expire.

The Scouting Report: Extending the Homebuyer Tax Credit

Wed, 11 Nov 2009 12:30:00 GMT

Event Information:

November 11, 2009, 12:30 PM to 1:30 PM

President Obama approved the expansion and extension of the homebuyer tax credit initially approved as part of the economic stimulus package. While this move is intended to spur home sales, many experts argue that extending the tax credit is bad policy. On Wednesday, November 11, Ted Gayer and Politico Senior Editor Fred Barbash will be online to answer your questions about the homebuyer tax credit in a live web chat.

Dodd’s Single Banking Regulator Proposal Promising

Tue, 10 Nov 2009 00:00:00 GMT

Senate Banking Committee Chairman Christopher Dodd is introducing legislation to consolidate banking regulation into one federal agency. Doug Elliott says having one regulator for “safety and soundness” and another focused on consumer protection is promising, should help avoid regulatory arbitrage and could hopefully prevent another financial crisis.

Counting the Jobs Produced by the Stimulus

Mon, 09 Nov 2009 00:00:00 GMT

When the stimulus package was enacted last winter, the Obama administration said its goal was to create or save 3.5 million jobs by the end of 2010. Gary Burtless analyzes how closely the administration is coming to achieving that goal so far. He finds that, on the whole, recent reports have understated the net effect of the stimulus program on overall employment by not taking into account the indirect effects of the stimulus on consumer spending and employment.

New Unemployment and Productivity Numbers are Bad News for Job Seekers

Fri, 06 Nov 2009 00:00:00 GMT

The latest employment and unemployment statistics confirm that, at least in the job market, this is the worst economic downturn since the Great Depression, says Gary Burtless. These jobs numbers followed on the heels on new stronger productivity numbers, showing truly bad news for job seekers.

Feds Pony Up Toward Great Lakes Water ‘Magic’

Wed, 04 Nov 2009 00:00:00 GMT

During a recent visit to Milwaukee, John Austin explored the economic revitalization of the Great Lakes region. Austin writes that these efforts have been given a major boost by President Obama, signing a bill that provided $475 million in Great Lakes cleanup dollars, a down-payment on a long term multi-billion dollar federal-state-local plan to clean water and reboot municipal waste systems. The empirical data shows that the clean up is creating jobs and is an economic engine throughout the Great Lakes region.

Cap-and-Trade Costs: Place Matters

Tue, 03 Nov 2009 00:00:00 GMT

Much is in question today as Senate Environment and Public Works Committee chairman Barbara Boxer tries to push ahead with work on climate-change legislation, with Republicans threatening a boycott of the markup. Mark Muro and Jonathan Rothwell examine the costs of cap-and-trade regulations for the U.S. economy and families.

Bipartisan Budget Solution

Tue, 03 Nov 2009 00:00:00 GMT

In light of the news that a group of ten senators has called for the creation of a bipartisan commission on the budget to create a long-term plan to reduce budget deficits, Isabel V. Sawhill cautions that failing to institute such a plan could lead to slower growth or an economic crisis, along with reduced flexibility to get the economy moving again or handle a new international threat.

The Stock Market Crash and Our Current Recession

Mon, 02 Nov 2009 12:00:00 GMT

This month marks 80 years since the Wall Street crash of 1929 that was one cause of the Great Depression. Alice Rivlin says the 1929 crash led to the creation of the financial and social safety net measures that have helped prevent today's economic crisis from being a full-blown depression.

Five Myths About Our Land of Opportunity

Sun, 01 Nov 2009 00:00:00 GMT

Americans have always believed that their country is unique in providing the opportunity to get ahead. Ron Haskins and Isabel Sawhill deconstruct five myths about economic mobility in the United States, saying that we need better policies to help create a true opportunity society.

Designing Loan Modifications to Address the Mortgage Crisis and the Making Home Affordable Program

Fri, 30 Oct 2009 00:00:00 GMT

In order to shore up the housing market and prevent foreclsoures, the government has instituted the Home Affordable Modification Program (HAMP). Larry Cordell, Karen Dynan, Andreas Lehnert, Nellie Liang and Eileen Mauskopf find that HAMP's key features should alleviate some of the previous obstacles to successful loan modifications. But, they say, the program is not well-suited to address payment problems associated with job loss, and they believe focusing on reducing payments rather than principal is ineffective when the homeowner has negative equity, with short sales being a better option.

Putting the Expected Strength of the Recovery into Historical Context

Fri, 30 Oct 2009 00:00:00 GMT

Yesterday's GDP figures may show that growth has returned to the US economy, but 3.5 percent isn't a strong rebound compared to past recession bounce-backs, writes Karen Dynan. She says the recovery will likely be long, and that means the economy is unlikely to see full employment for many years.

Around the Halls: Is the Recession Over?

Thu, 29 Oct 2009 00:00:00 GMT

The nation appears to have entered a fragile state of recovery, with the worst recession since the 1930s at an end. After four straight quarters of contracting economic activity, the Commerce Department reported this morning that the economy grew in the third quarter of 2009, fueled by government spending on cars and homes. Experts from around the halls of Brookings responded to this news.

The Outlook for Consumer Spending and the Broader Economic Recovery

Thu, 29 Oct 2009 00:00:00 GMT

How long will the economic recovery take? Karen Dynan testified before the Joint Economic Committee that there is a great deal of uncertainty about the strength and speed of the nation’s recovery, with gradual expansion being the most likely economic scenario. She says that consumer spending is likely to grow modestly over the next few years because of weak income growth, higher saving and lower borrowing. Policymakers have options to bolster the recovery but they should be mindful of the long-run costs, particularly in terms of the budget deficit, she says.

The Financial Crisis and Personal Saving

Wed, 28 Oct 2009 00:00:00 GMT

The current financial crisis has had a great impact on how Americans are saving. In a presentation for the “National Forum to Encourage Lower-Income Household Savings,” Karen Dynan explained that while aggregate personal saving should be markedly higher than before the crisis, it is difficult to predict the level of saving for lower-income households.

The Scouting Report Web Chat: Expanding Opportunity in America

Wed, 28 Oct 2009 00:00:00 GMT

Recent decades have seen sharply rising incomes for the rich, modest progress for the middle class, and little or no progress for the poor. How can more people achieve the American Dream? To address the question, Ron Haskins and Politico senior editor Fred Barbash conducted a live web chat about expanding economic opportunity in America.

Initial Comments on the Draft House Bill on Systemic Risk and “Too Big to Fail”

Wed, 28 Oct 2009 00:00:00 GMT

As the financial system continues to stabilize, the House Financial Services Committee has drafted legislation intended to prevent future crises. The latest bill, which has been endorsed by the Obama administration, focuses on systemic risk and financial institutions that are deemed to be “too big to fail.” Douglas Elliott analyzes the 253-page bill, saying he thinks the enhanced resolution authority is essential, but he raises serious concerns about the structure of the council intended to tackle systemic risks.

The Scouting Report: Expanding Economic Opportunity

Wed, 28 Oct 2009 12:30:00 GMT

Event Information:

October 28, 2009, 12:30 PM to 1:30 PM

Recent decades have seen sharply rising incomes for the rich, modest progress for the middle class, and little or no progress for the poor. How can more people achieve the American Dream? On Wednesday, October 28, Ron Haskins and Politico Senior Editor Fred Barbash conducted a live web chat about expanding economic opportunity in America.

Behavioral Economics and the Conservative Critique of VAT

Wed, 28 Oct 2009 00:00:00 GMT

Some economists and policymakers are discussing the idea of a value added tax (VAT) as a way to solve our deficit problems. Ted Gayer looks at the VAT through the prism of behavioral economics and warns that policymakers could use insights gleaned from this field of economics to deliberately temper healthy economic and political constraints on the growth of government.

Jean Pisani-Ferry on the Transatlantic Economy After the Global Financial Crisis

Mon, 26 Oct 2009 17:00:00 GMT

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October 26, 2009, 5:00 PM to 7:00 PM

On October 26, the Center on the United States and Europe at Brookings hosted Jean Pisani-Ferry, a leading French economist, to deliver the Sixth Annual Raymond Aron Lecture. Mr. Pisani-Ferry assessed the impact of the global financial crisis on the closely intertwined economies of Europe and the United States, and their influence on the world economy.

Systemic Risk in the Financial System: Insights from Network Science

Fri, 23 Oct 2009 00:00:00 GMT

The financial system is comprised of networks of connectivity, Ross Hammond dicusses how these networks may have enabled disruptions initially affecting only a few financial actors to rapidly spill over into a system-wide crisis.

Pay Limits: Not Smart

Fri, 23 Oct 2009 00:00:00 GMT

The Obama administration’s pay czar imposed limits on executive compensation for bailed-out Wall Street firms. Doug Elliott says the actions are not smart, sending the message to those employees that their pay will not be determined the same way as on the rest of Wall Street and will be considerably lower and more volatile. This risks losing the best people, since the ones that move are always those who have the best options elsewhere.

Stock Market Crash, 80 Years Later

Fri, 23 Oct 2009 00:00:00 GMT

The “Black Tuesday” stock market crash of 1929 still haunts us on its 80th anniversary this Thursday. William Galston describes the actions taken over this past year to avert a second Great Depression and suggests that the flap over Wall Street bonuses signals a return to business as usual. Our political system has a duty to act against the obvious abuses, he writes.

On the Road Again? A Look at the U.S. Auto Industry with Steven Rattner

Wed, 21 Oct 2009 13:00:00 GMT

Event Information:

October 21, 2009, 1:00 PM to 2:30 PM

On October 21, the Initiative on Business and Public Policy explored the government’s role in the struggling auto industry and their future relationship. Steven Rattner, former head of the Obama administration’s Task Force on the Auto Industry, delivered the keynote address.

Is the American Dream a Myth?

Tue, 20 Oct 2009 08:24:00 GMT

Despite its status as one of the world’s leading economies, the United States is faced with high poverty rates and less economic opportunity than many other affluent countries. Senior Fellows Isabel Sawhill and Ron Haskins, argue that it will take a combination of personal responsibility along with smarter and better-targeted government policies to make the American Dream a reality for children and families now stuck at the bottom.

What Should be Done About Bank Size?

Mon, 19 Oct 2009 00:00:00 GMT

In light of the debate over whether the Obama administration's plan for financial regulation goes far enough to curb institutions that become "too big to fail," Martin Baily addresses the question of whether any regulation of "systemic risk" will inevitably lead to the designation of some banks as "too big to fail."

Fed Should Focus on Macro, not Micro

Mon, 19 Oct 2009 00:00:00 GMT

Amid White House efforts to revamp financial sector regulations—including creation of a new oversight agency—Martin Baily argues that the Federal Reserve should not take over this responsibility. The Fed, he says, is in a unique position to take on the macro side of prudential regulation—that of the systemic risk regulator, a responsibility that would well suit its purview of the overall stability and performance of the macro economy.

Tax Cuts for New Hires: Not Yet Ready for Prime Time

Fri, 16 Oct 2009 00:00:00 GMT

Gary Burtless addresses the idea of a tax credit for job creation, concluding that although the idea is attractive, it is not one that has a conspicuous record of success. The closest analogy to the kind of job creation tax incentive now under discussion is the 1970s era New Jobs Tax Credit, which demonstrated that creating a well designed subsidy is difficult if not impossible.

The Scouting Report Web Chat: Creating Opportunity in America

Wed, 14 Oct 2009 00:00:00 GMT

On Wednesday, October 14, Sawhill, a Brookings expert and co-author of the recent book Creating an Opportunity Society, answered your questions during a live web chat about what Americans can do to get ahead in today’s turbulent economy. Fred Barbash, senior editor at Politico, moderated the discussion.

Fix Baucus' Health Reform Rx: Three Big Changes Democrats Must Make for the Bill to Work

Wed, 14 Oct 2009 00:00:00 GMT

Henry Aaron argues that it is essential that the health care reform bill authored by Sen. Max Baucus and recently passed by the Senate Finance Committee undergo some modification if it is to truly expand coverage, improve care and drive down costs.

The Scouting Report: Creating Opportunity in America

Wed, 14 Oct 2009 12:30:00 GMT

Event Information:

October 14, 2009, 12:30 PM to 1:30 PM

Isabel Sawhill, a Brookings expert and co-author of the recent book Creating an Opportunity Society, answered questions during a live web chat about ways to expand the middle class and make upward mobility a reality for families, including: more and better education, more work and strong families. Fred Barbash, senior editor at Politico, moderated the discussion.

More on the Homebuyer Tax Credit

Wed, 14 Oct 2009 00:00:00 GMT

Ted Gayer addresses the potential cost of a home buyer tax credit in light of the Congressional Joint Committee on Taxation’s cost estimate and still concludes that the credit would be a poorly targeted subsidy, even if the program is smaller and shorter in duration.

Bend the Revenue Curve: Health Reform Alone Won't End Deficits

Tue, 13 Oct 2009 00:00:00 GMT

Although health care reform is intended to bend the curve of spending and reduce the deficit, it alone will not be enough, say Henry Aaron and Isabel Sawhill. They propose that Congress enact a value-added tax, the equivalent of a broad-based sales tax on all goods and services. The revenue from the new tax, and other sources, should be linked directly to public health care spending through a newly created trust fund which would pay for all federal health care spending.

Extending and Expanding the Homebuyer Tax Credit Is a Bad Idea

Fri, 09 Oct 2009 00:00:00 GMT

The housing market, while showing some signs of recovery, is still weak, which is why policymakers are considering more ways to support it. One idea is to extend and expand the homebuyers tax credit. Ted Gayer says the proposal is misguided, poorly targeted and very expensive.

What About Microeconomics?

Mon, 05 Oct 2009 00:00:00 GMT

Robert Crandall and Clifford Winston respond to Paul Krugman's recent New York Times Magazine article which laments the current state of macroeconomics. The authors call attention to the fact that Krugman did not mention the state of microeconomics which, they argue, has not suffered any serious intellectual setbacks from the current Great Recession.

The Scouting Report Web Chat: The U.S. Budget Deficit

Wed, 30 Sep 2009 00:00:00 GMT

The soaring U.S. budget deficit is projected to total more than $1 trillion for the fiscal year that ends September 30. Brookings guest scholar and former Member of Congress William Frenzel, along with Politico’s Fred Barbash, answered your questions about the danger of the increasing U.S. budget deficit and its link to health care reform and economic growth.

What Role Can Health Care Reform Play in Restoring Middle Class Prosperity?

Wed, 30 Sep 2009 00:00:00 GMT

Isabel Sawhill examines the effect of the proposed health care reform legislation on the middle class. She concludes that the reform will be a false victory if all it does is expand coverage and increase choice, without substantially affecting what our health care dollars buy.

Housing Sales Flat, Risk Remains

Wed, 30 Sep 2009 14:56:26 GMT

New U.S. home sales were flat in August and existing home sales fell, showing that the housing sector still remains weak. Ted Gayer, co-director of Economic Studies, says there has been some housing stabilization thanks to the Federal Reserve, but that there is still downside risk in the market. Costly tax incentives to encourage homeownership have long-term budget consequences.

The Scouting Report: The U.S. Budget Deficit

Wed, 30 Sep 2009 12:30:00 GMT

Event Information:

September 30, 2009, 12:30 PM to 1:30 PM

On Wednesday, September 30, Brookings guest scholar and former Member of Congress William Frenzel, along with Politico’s Fred Barbash, answered your questions about the U.S. budget deficit and its link to health care reform and economic growth.

Too Big to Fail: “Systemic Importance” and Moral Hazard

Wed, 30 Sep 2009 00:00:00 GMT

Gary Burtless examines the events of the past eighteen months and concludes that the status quo poses great risk to the U.S. finanical system and thus the current regulatory regime cannot be left unchanged.

Consumer Financial Protection: Advantages, Dangers and Should it be a New Agency?

Wed, 30 Sep 2009 00:00:00 GMT

Martin Baily argues that if there had been better consumer protection prior to the financial crisis, it would have ameliorated the severity of the crisis and might even have forestalled it. The best choice for the United States is a single conduct-of-business regulator and the Securities and Exchange Commission is the natural home for such a consumer protection agency.

R.I.P. Public Option

Tue, 29 Sep 2009 00:00:00 GMT

Henry Aaron discusses the likely demise of the public option and laments that such a minor issue has continually diverted attention from reform issues that really count - how to create health insurance exchanges, what powers to give them, how much insurance people should have, what subsidies low-income households need to make that insurance affordable, and how to change health care delivery to realize the full potential of modern medicine.

U.S. and the G-20 Summit: Perspectives on Global Leadership

Mon, 28 Sep 2009 00:00:00 GMT

The Pittsburgh G-20 Summit was a significant milestone for President Obama's leadership role in the international community. Colin Bradford reflects on what the Summit meant for the United States and how it was shaped by the president's involvement.

Quantifying the Effects on Lending of Increased Capital Requirements

Thu, 24 Sep 2009 00:00:00 GMT

The proposed higher capital requirements for U.S. banks being discussed at the G-20 meeting as part of the financial sector reforms is likely to have a relatively modest impact on bank lending, according to Douglas Elliott. Tougher capital requirements can powerfully aid the stability of the system without doing excessive damage to lending or the economy, he says.

Should Congress Extend the First-time Homebuyer Tax Credit?

Thu, 24 Sep 2009 00:00:00 GMT

Today’s existing-home sales numbers, which were below expectations, show that the housing market is still soft. Moves by the Fed to phase out its mortgage-backed security program may lead to increased mortgage interest rates, says Economic Studies Co-Director Ted Gayer. But he says the first-time homebuyer tax credit is expensive, poorly targeted and should not be extended.

What's at Stake for Pittsburgh? The G-20 Should Focus on What's Good for Cities

Tue, 22 Sep 2009 00:00:00 GMT

Pittsburgh's "new economy" may be the key reason for the city's star turn as host of the September 2009 G-20 summit. But Bruce Katz argues that the seemingly abstract, big-picture decisions made at the gathering have big implications for Pittsburgh’s “next economy” and for metropolitan areas across the nation.

Is the Stimulus Working?

Tue, 22 Sep 2009 00:00:00 GMT

William Gale examines whether or not the stimulus is working, concluding that a number of key factors suggest that the stimulus is positively affecting the economy.

The Threat to Work

Tue, 22 Sep 2009 00:00:00 GMT

Ron Haskins states that one of the few government strategies that has proven successful in reducing poverty is encouraging or demanding that adults on welfare work, even at low wage jobs, and then subsidizing their earnings but with employment, income, and earnings stagnant or in decline for nearly a decade now, it is time to worry.

What Does International Experience Tell Us About Regulatory Consolidation?

Mon, 21 Sep 2009 00:00:00 GMT

Examining the structure of financial regulation to see what lessons there may be for the United States, Martin Baily and Adriane Fresh dispel the idea that the experience of other countries makes it a waste of time to attempt substantial consolidation of regulatory agencies in the United States.

Step One: Addressing Health Care Costs

Thu, 17 Sep 2009 00:00:00 GMT

Isabel Sawhill explains why addressing rising health care costs has to be the first step in solving the nation’s long term fiscal problems.

Bad News on Poverty, Worse to Come

Wed, 16 Sep 2009 00:00:00 GMT

Isabel Sawhill examines the latest poverty statistics, concluding that with the policy community so heavily focused on health care reform, the plight of the least advantaged in our society is getting too little attention.

Health Reform Now - for the Next Recession

Wed, 16 Sep 2009 00:00:00 GMT

Alice Rivlin states that a comprehensive reform of the health care system is necessary to reduce the impact of future recessions on working people and make our economy more resilient.

The Scouting Report: Global Financial Crisis, One Year On

Wed, 16 Sep 2009 12:30:00 GMT

Event Information:

September 16, 2009, 12:30 PM to 1:30 PM

The collapse of Lehman Brothers in September 2008, combined with the government takeover of Fannie Mae and Freddie Mac, helped trigger the worst financial crisis in the United States since the Great Depression. In this week’s edition of the Scouting Report, Douglas Elliott—a former investment banker and current fellow at Brookings—answered your questions about the financial crisis and where we stand one year later. Fred Barbash, senior editor at Politico, moderated the discussion.

An Update on the Economic and Fiscal Crises: 2009 and Beyond

Tue, 15 Sep 2009 00:00:00 GMT

William Gale and Alan Auerbach review recent economic events and their impact on U.S. fiscal performance and prospects, highlighting the historic nature of the 2009 budget outcomes, the unsustainability of plausible ten-year budget projections, and the increasingly dire long-term fiscal problem.

Unemployment Insurance for the Great Recession

Tue, 15 Sep 2009 00:00:00 GMT

During testimony before the U.S. Senate Committee on Finance, Gary Burtless stated that the basic system of financing unemployment insurance is scandalously out of date and recommended that Congress consider a basic overhaul of the system.

The Future of Financial Institutions After the Global Financial Crisis

Tue, 15 Sep 2009 10:21:31 GMT

It’s been one year since the economic crisis hit hard with the failure of Lehman Brothers, which reverberated throughout the financial sector and the world. President Obama gave a speech on Wall Street pressing for financial system reforms to prevent a future similar crisis. Vice President and Economic Studies co-director Karen Dynan evaluates the impact of the government’s intervention over the past year and where we go from here.

MetroMonitor: An Uneven Economic Recovery

Tue, 15 Sep 2009 09:55:33 GMT

Alan Berube, research director of Brookings’ Metropolitan Policy program, says the second MetroMonitor shows an uneven recovery, that economic gains in some regions of the country have been offset by an increase of financial instability in others.

A Year in Turmoil: An Address By Fed Chairman Ben Bernanke

Tue, 15 Sep 2009 10:00:00 GMT

Event Information:

September 15, 2009, 10:00 AM to 12:00 PM

This week marks the one-year anniversary of Lehman Brothers' collapse. Federal Reserve Chairman Ben Bernanke delivered a keynote about the tumultuous events of last September at a Brookings forum on Tuesday. Brookings Vice President Karen Dynan moderated a panel with other experts on the state of financial markets and regulatory reform.

A Year in Turmoil: Remarks Following an Address by Fed Chairman Ben Bernanke

Tue, 15 Sep 2009 00:00:00 GMT

On September 15, one year after the Lehman collapse, the Brookings Institution hosted a forum to explore the tumultuous events of last September, where financial markets stand today and the status of regulatory reforms designed to prevent the next financial crisis. Ted Gayer participated in a panel discussion following Fed Chairman Ben Bernanke's keynote address.

The Current Health of Financial Market Reform

Mon, 14 Sep 2009 00:00:00 GMT

Gary Burtless examines the current state of financial market reform and addresses the importance of a complete overhaul of the financial regulation system in the United States, observing that if the rules of the financial game are not changed by government policymakers, private decision-makers are likely to resume the same bad behavior that gave us last year’s crisis.

Could a Resurgent Global Economy Relapse into Global Imbalances?

Mon, 14 Sep 2009 00:00:00 GMT

A year after the bankruptcy of Lehman Brothers and the ensuing near collapse of the U.S. financial system, Eswar Prasad reflects on what led to these circumstances and urges for coordinated solutions to avoid further global imbalances.

The Outlook for the U.S. Economy: Echoes of Japan’s Lost Decade

Mon, 14 Sep 2009 00:00:00 GMT

The panic is over, writes CNAPS Guest Scholar Naoki Abe. The outlook for the U.S. economy has brightened as the worst period for financial institutions is passing. However, the lesson from Japan’s “lost decade” is that full-fledged economic recovery requires sustained financial health and bullish economic momentum; while the financial panic is over, financial hardships are not over yet.

Has Wall Street Learned Its Lesson?

Mon, 14 Sep 2009 00:00:00 GMT

One year after investment banking firm Lehman Brothers filed for bankruptcy protection, kicking off a week of massive shifts on Wall Street that was the beginning of the largest financial crisis in recent memory, Douglas Elliott participated in a live online chat to discuss the effect the financial crisis has had on the banking industry.

Tracking Economic Recession and Recovery in America’s 100 Largest Metropolitan Areas

Mon, 14 Sep 2009 00:00:00 GMT

The second in a series of interactive quarterly reports, the MetroMonitor ranks the nation’s 100 largest metro areas—which generate three quarters of U.S. output—on key indicators of economic performance. This edition of the monitor reveals that, amid signs at the national level that job and income losses are slowing, metropolitan economies continued to perform at highly variable rates through June 2009. While several metro areas may have reached a turning point, there are many others that still have not touched bottom, as well as a few that have almost fully recovered.

Simulating the Effect of the “Great Recession” on Poverty

Thu, 10 Sep 2009 00:00:00 GMT

Emily Monea and Isabel Sawhill argue that in light of the projected increases in U.S. poverty levels, more attention should be paid to the adequacy of the safety net plus health care, education, job training and other means of insuring that more Americans are able to benefit from the opportunities that a growing economy will eventually provide.

Is Health Spending Excessive? If So, What Can We Do About It?

Thu, 10 Sep 2009 00:00:00 GMT

In this new article, Senior Fellow Henry Aaron and Paul B. Ginsburg discuss the delicate task of reining in spending without harming our welfare.

What the President's Speech Means for Health Care Reform

Thu, 10 Sep 2009 18:08:23 GMT

After the President addressed a Joint Session of Congress, Senior Fellow Henry Aaron offers his view on where health care reform efforts move from here. Aaron says that the president delivered a strong and persuasive speech that spells out his vision for health care reform, and that Congress and Republicans stand to gain much by helping to deliver important reform.

The 2008 Statistics on Income, Poverty, and Health Insurance Coverage

Thu, 10 Sep 2009 00:00:00 GMT

On September 10, the day the U.S. Census Bureau released its annual poverty report, Gary Burtless addressed the seventh annual the Brookings Center on Children and Families briefing and discussed the new figures and their implications for families and policymakers.

Responding to Professor Krugman's Opus

Tue, 08 Sep 2009 00:00:00 GMT

Martin N. Baily responds to the National Journal’s question regarding a recent New York Times Magazine column from Paul Krugman entitled, “How Did Economists Get it So Wrong?” in which Krugman argues that the recession points to a muddy future for economic theory and a greater legitimacy for behavioral economics.

Fix Health Care. But Fix the Deficits, Too

Tue, 08 Sep 2009 00:00:00 GMT

Senior Fellow William G. Gale and Alan J. Auerbach argue that while Obama must spell out a plan for reducing health costs, that will only partly address the long-term fiscal gap. Taxes and broader cuts are needed to solve the government's long-term financial problems.

The Government Takeover of Fannie Mae and Freddie Mac

Thu, 03 Sep 2009 16:50:10 GMT

It’s been one year since Fannie Mae and Freddie Mac had to be taken over by the government to prevent their collapse. Ted Gayer talks about what went wrong and why these government-sponsored enterprises were treated as "too big to fail."

The Progress of the Recovery Act: A Discussion with Vice President Joe Biden

Thu, 03 Sep 2009 10:00:00 GMT

Event Information:

September 03, 2009, 10:00 AM to 11:00 AM

On Day 200 of the American Recovery and Renewal Act, Brookings hosted Vice President Joe Biden. As the chief administration official entrusted with the implementation of the stimulus plan, he offered a working perspective on the program’s accomplishments and challenges.

The "New Normal" For the U.S. Economy: What Will It Be?

Tue, 01 Sep 2009 00:00:00 GMT

We are likely to enter a period of new normality marked by lower household debt, higher personal savings, and less consumption as a share of GDP, writes William Galston. Despite these positive trends, we still need a new era of public restraint, not just private thrift. Once economic growth has become self-sustaining and the private sector’s need for capital returns to more normal levels, Congress and the administration will have to turn their attention to the difficult fiscal questions they have long evaded.

Ben Bernanke’s Second Term and the Federal Budget Forecast

Thu, 27 Aug 2009 09:45:34 GMT

President Barack Obama has nominated Ben Bernanke to serve a second term as Chairman of the Federal Reserve. The nomination came on the same day the White House announced a sharp increase in projected deficits. Alice Rivlin says the deficit projections should serve as an impetus for officials to step up efforts to fix the floundering economy. She also gives the Bernanke nomination her nod of approval.

Activist Fiscal Policy to Stabilize Economic Activity

Mon, 24 Aug 2009 00:00:00 GMT

Facing the most severe recession since the 1930s, the U.S. government has pursued an aggressive countercyclical fiscal policy, which is striking given the consensus a decade ago against the use of discretionary fiscal policy as a stabilization tool. In this new paper, William Gale and Alan J. Auerbach consider the evidence on the effects of discretionary fiscal policy, beginning with how the practice of this policy has changed over time.

The Scouting Report: Congress at the August Recess

Wed, 19 Aug 2009 12:30:00 GMT

Event Information:

August 19, 2009, 12:30 PM to 1:30 PM

With Congress out on recess, climate change and health care reform efforts are stalled. Thomas Mann and Politico's Fred Barbash took questions in a live web chat on whether partisan gridlock and hefty price tags could prevent these bills’ passage.

The Deficit Threat and the Recovery

Mon, 17 Aug 2009 00:00:00 GMT

The federal deficit represents a serious long-term problem. According to Gary Burtless, it is not, however, a threat to our economic recovery, nor will it be a threat anytime soon. Our near-term problem is weakness in private demand rather than excess government borrowing.

Catastrophic Financial Meltdown Avoided

Thu, 13 Aug 2009 00:00:00 GMT

Alice Rivlin responds to the Washington Post's inquiry as to whether she agreed with the Federal Reserve's statement Wednesday, following a better-than-expected employment report and brisk auto sales, that the economy is "leveling out."

Stimulus at Six Months: Boom or Bust?

Thu, 13 Aug 2009 10:00:00 GMT

Event Information:

August 13, 2009, 10:00 AM to 11:30 AM

Six months after Congress passed a two-year, $787 billion stimulus plan to revive America’s economy, conflicting numbers fuel arguments of both proponents and critics. A panel of Brookings experts weighed the evidence and discussed whether the money was strategically deployed to invigorate the nation’s economy, to create jobs and to advance school reform.

Is the U.S. Economy Stabilizing?

Mon, 10 Aug 2009 12:39:31 GMT

Since crashing last October, with a continuing free fall for much of the first part of 2009, the stock market has been gradually climbing back up to healthier levels. Douglas Elliott says the market rally is one sign that the economy is stabilizing – at least in the near term.

Comparing the Recessions in Germany and the United States

Mon, 10 Aug 2009 12:54:35 GMT

The world recession that began in the U.S. is hitting Germany much harder than us, due to a collapse in world trade that has damaged an economy that Germans constantly refer to as “the World Export Champion.” But, Douglas Elliott explains, Germans feel much better about their economic situation than Americans do about ours.

Whose Stimulus: President Obama’s or the Democratic Congress’?

Fri, 07 Aug 2009 00:00:00 GMT

Many conservative commentators including, Michael Gerson, disdain President Obama’s stimulus bill and have trumpeted its alleged shortcomings. However, the accuracy of these criticisms is far from self-evident; it will be assessed by analysts in the months and years ahead as the bill’s funds are expended and evidence becomes available on their impact on the micro and macro-economy, writes Thomas Mann.