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Insights from Old Parkland

Race and Economic Opportunity in the United States

August 3, 2024

Recently released research from Harvard economist Raj Chetty and the Opportunity Insights team reinforces AEI scholars’ long-standing argument that stable employment and married families are key to increasing upward mobility. Earlier this year, Chetty privately previewed his findings in a conversation with AEI President Robert Doar at the 2024 Old Parkland Conference. Watch their conversation here.

 

 

These encouraging shifts in economic mobility are mirrored by positive trends in Americans’ retirement savings. In a new AEI Economic Perspectives report, AEI Senior Fellow and former Principal Deputy Commissioner at the Social Security Administration Andrew G. Biggs explains why there are no signs of a “retirement crisis” now or in the future.

 

In 2016, there was a 13-point gender gap in presidential voting preferences, as 54 percent of women voted for Hillary Clinton compared to only 41 percent of men. Director of AEI’s Survey Center on American Life Daniel A. Cox examines whether Kamala Harris’s candidacy will create a similar split.

 

Among many issues at stake in this election is the future of federal student lending, after years of repeated attempts at outright and de facto forgiveness by the Biden administration. In a new AEI report, coauthored with researchers from EducationCounsel and the Century Foundation, Beth Akers proposes a more sensible, bipartisan policy agenda for federal graduate student lending that better protects both students and taxpayers.

 

Democrats’ fixation on loan forgiveness reflects their party’s drift away from the working class toward college-educated voters. Ruy Teixeira argues that this shift makes it difficult for Harris to reconstitute Barack Obama’s coalition and narrows her path to victory in November.

 

Was Pandemic Fiscal Relief Effective Fiscal Stimulus? Evidence from Aid to State and Local Governments

During the COVID-19 pandemic, the federal government provided state and local governments with almost $1 trillion in total fiscal assistance to avoid cuts to public employment and public services while stimulating the economy. How effective was this aid? A new working paper from Stan Veuger, Philip G. Hoxie, and Jeffrey Clemens quantifies this aid’s effects on public-sector employment, the labor market more broadly, and aggregate income and output. They find that this aid had a modest impact on government employment, with little evidence of benefits for private businesses or the overall economic recovery. As a job-preservation mechanism, this aid was far less cost-effective than other pandemic programs, costing on average an estimated $603,000 per worker-year to preserve state and local government jobs, more than double the cost of the highest estimates of the Paycheck Protection Program.

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QUOTE OF THE WEEK


President Biden often says ‘show me your budget, and I’ll tell you what you value.’ If he is right, Harris’ mostly forgotten Senate agenda shows the high value she places on dramatically expanding federal benefits, spending and deficits. Republicans stood in the way of that agenda while Harris was in the Senate, and for the last two years under their House majority. The next 100 days will determine not only whether Harris moves up to the White House, but also whether any brake remains on her mostly forgotten record of extraordinary fiscal recklessness.

Matt Weidinger