 
The Case for
Deficit-Financed Investment
When asked last week about his
proposed corporate tax hike—pitched alongside the American Jobs Plan
last month—President Biden told reporters, “I’m willing to compromise but
I’m not willing to not pay for what we’re talking about. I’m not
willing to deficit spend.”
That’s the wrong approach, as
Roosevelt Fellow J.W. Mason told CNN. "When they put down that marker,
'we're gonna pay for this 100 percent,' and then they find that it's
hard to get those taxes through . . . you end up with a smaller
program than the country needs and that's the danger."
The right approach?
Deficit-financed investment, Roosevelt’s Emily DiVito argues
on
the blog.
“The US federal government has the
means and the ability to . . . make bigger investments with deficit
spending, circumventing the need for pay-fors to raise revenue or
reduce spending elsewhere,” she writes.
Three reasons we should do so
now:
- We need
to. After decades of underinvestment in our infrastructure and people,
and insufficient action against the climate crisis, the combined $4
trillion of the American Jobs Plan and American Families Plan won’t be
enough.
- The
extra money can help us recover faster, more fully, and more
equitably.
- The
investment would pay for itself, in the form of increased economic
productivity and potential—and with today’s low interest rates likely
to last a while, there’s little risk.
Read
on.
 Examining
the Racial Wealth Gap
On Wednesday, Roosevelt Fellows Mehrsa Baradaran and Darrick
Hamilton testified at the US Congress Joint Economic Committee
hearing,
“Examining the Racial Wealth Gap in the United
States.”
“An essential first step in dealing
with the wealth gap is to acknowledge that public policy created the
wealth gap and must be used to address it,” Baradaran said. “Full
justice demands a recognition of the historic breach of the social
contract between America’s constitutional democracy and Black
Americans. And contract breach requires a remedy.”
“[A]cknowledgment alone will be
empty if not accompanied by some form of material redress: Reparations
provides a retrospective, direct, and parsimonious approach to address
the Black-white racial wealth gap,” said Hamilton. “Moreover, it is a
racially just policy because it requires the US to take public
responsibility and atone for its long history of racial
injustice.”
Read and watch
Baradaran’s and Hamilton’s full testimonies.
 Regulating Stock Buybacks
From 2010 to 2019, publicly traded companies spent a total of $6.3
trillion on stock buybacks—that is, repurchases of their own shares on
the open market.
But, Roosevelt Fellow Lenore
Palladino and William Lazonick explain in a new working
paper, stock
buybacks manipulate stock prices and enrich corporate executives at
the expense of workers and taxpayers—and innovation.
“Before the pandemic hit, the
corporate governance ideology of shareholder primacy contributed to
the country’s widening income and wealth inequality by
disproportionately directing corporate funds to white, wealthy
households who own 85 percent of corporate stock, while workers
experienced four decades of wage stagnation,” they write.
As Palladino
told Vox’s Emily Stewart, “The fact that the
stock market is booming is because of the financialization of our
goods- and services-producing companies, not because the real economy
is doing so well.”
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