Robert Reich - The Biggest Economic Challenge of Obama's Second Term: Restore the "Basic Bargain"

http://robertreich.org/post/31257103352

The Biggest Economic Challenge of Obama’s Second Term

MONDAY, SEPTEMBER 10, 2012

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At the Republican convention in Tampa, Florida, Romney produced the predictable set of Republican bromides: cut taxes on corporations and the already rich, cut government spending (mainly on the lower-middle class and the poor), and gut business regulations. It’s the same supply-side nonsense that got the economy into trouble in the first place.

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It’s a start but America’s middle class and poor need far more. They need to be able to refinance their mortgages at today’s low interest rates. They need a larger Earned Income Tax Credit – a wage subsidy for lower-paying jobs. And a higher minimum wage that’s automatically adjusted for inflation.

They could use a new Works Projects Administration and Civilian Conservation Corps designed to put the long-term unemployed back to work.

They need stronger unions to bargain for a larger share of the gains from economic growth. And a Social Security payroll tax that exempts the first $25,000 of income and eliminates the ceiling (now $110,100) on income subject to it.

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In accepting his party’s nomination for president, Obama said the “basic bargain” that once rewarded hard work and gave everyone a fair shot had come undone.

He’s right. And the U.S. economy won’t return to normal until that basic bargain is remade.

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