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AEI's weekly digest of top commentary and scholarship on the issues that matter most

With One Key Exception

Why the Budget Deal Is Good News for Defense

June 3, 2023

Elaine McCusker gives three reasons this week’s debt-ceiling deal is good news for America’s national defense and one reason it’s not. McCusker explains how the deal not only safeguards America’s economy, security, and reputation but also removes legislative delays in appropriations and “arbitrary requirements linking defense and non-defense spending.” The deal’s biggest drawback, she says, is its low defense spending caps.

 

 

Marc A. Thiessen presents the “America First” case for supporting Ukraine in 10 compelling points. From deterring China’s aggression to strengthening our defense industrial base, Thiessen argues that conservatives focused on US national interests have clear reasons to get behind US aid to Ukraine.

 

Questionable government data have impeded research into the problem of homelessness in America. Breaking through this impasse, Bruce D. Meyer, Kevin Corinth, and Angela Wyse evaluate federal datasets and develop a new approach to estimating the size of the US homeless population living in shelters. The coauthors also provide a rough estimate of the homeless population living on the streets.

 

In a new report from AEI’s Critical Threats Project, Nicholas Carl analyzes Iran’s alarming pivot toward preparing for offensive warfare. Carl warns that “Iran is building an increasingly capable and cohesive coalition of state security services and foreign militias” to adapt to modern threats and expand its regional influence.

 

Philip Wallach’s Why Congress (Oxford University Press, 2023) came out on May 30. Embracing the founders’ vision for a deliberative legislature, Wallach reveals the history of Congress’s institutional strength, how it was weakened, and how it might be restored. Get the book now to read Wallach’s comprehensive case for revitalizing Congress. 

Will a Recovery of Real Wages Obstruct Progress Toward Disinflation?

In the latest AEI Economic Policy Working Paper, Steven B. Kamin and John M. Roberts investigate what rising real wages might mean for reducing inflation. Kamin and Roberts concur with assessments that current, high wage-growth rates would not be consistent with the Federal Reserve’s inflation target. But the coauthors also underscore a pre-COVID-19 trend suggesting different wage-growth behavior. Anticipating divergent scenarios, they use a macroeconomic simulation to project how “the gap between real wages and their [current] trend could be resolved and their implications for inflation, unemployment, and interest rates.” Kamin and Roberts outline key results of their simulations. They show how the current situation could give way, among other outcomes, to a wage-price spiral and increased unemployment—or how disinflation and strong wage growth might coexist, especially if tight product markets slacken.

 

 

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QUOTE OF THE WEEK

The president wants the political benefits of heroically assisting the good of Ukraine against the evil of Russia, but his administration’s policy is much more hesitant than its bold declarations would suggest.

Kori Schake