Robert Reich

Robert B. Reich, a co-founder of The American Prospect, is a Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. His website can be found here and his blog can be found here.

Recent Articles

Eliminating the Debt

One party claims that the budget surplus will be small and that the most important goal is to eliminate the debt. The other says the surplus will be big and we can do ambitious things with it. You'd be forgiven if you thought that the first party was the Democrats and the second the Republicans. But it's actually the reverse. The Democrats are marching under the banner of fiscal austerity, and the Republicans proclaim this the era of large ambition. "Here's the facts," says George W., pointing to the latest estimate from the Congressional Budget Office (CBO) showing that the nation could well afford his plan to trim income taxes by $1.3 trillion over 10 years and still have enough money to fund social programs. The White House claims the surplus is far less. And it says retiring the debt should be the nation's first big priority. "Let's make America debt-free for the first time since 1835!" the president exuded in his State of the Union, offer-ing up a plan to pay off by 2013 the...

Best place to invest surplus: our children

USA Today To listen to the White House and Republicans, you'd think the biggest choice facing the nation is whether to use projected budget surpluses to "save Social Security," as the White House proposes, or to cut taxes across the board, as Congressional Republicans propose. Because the polls show most Americans want both, you can bet that whatever emerges will be a mushy combination. Is this really the Great Debate we ought to be having? No. Look closely, and neither alternative makes any sense. Social Security doesn't have to be saved because it's not heading for a crisis. The projected bankruptcy of Social Security by 2032 is based on the wildly pessimistic prediction that between now and then the U.S. economy will grow only 1.8% a year. Almost all economists predict growth will be 2.4% or better. It's been 4% for the last three years. If the economy grows by at least 2.4%, Social Security is fine for 75 years without spending a dime of the surplus. The White House doesn't want...

The Fiscal Response Is Too Tepid

Broadcast Oct 5, 2001 Alan Greenspan is pushing on a wet noodle. The Fed has repeatedly cut interest rates since January and nothing's happened which means that we shouldn't expect this week's half percent rate cut to have much impact either. Even figuring in the normal time lag between a rate cut and response, the fact is this economy just isn't responding. Luckily the car has two accelerators. If the Fed's monetary policy isn't enough, there's fiscal policy. This week, the president lent his support to a stimulus package of between $60 billion and $75 billion in the form of additional tax cuts and spending. Now the good news is that the White House and Congress are no longer obsessing about saving the Social Security surplus or indulging in any other accounting fiction. The national economy is near or in a recession, and Washington understands that now is the time for government to spend more and tax less even if that means temporarily going into the red. The bad news is that...

Use the Budget Surplus for Universal Health Care

Los Angeles Times Senate Democrats have managed to whittle George W 's tax cut from $1.6 trillion to $1.2 trillion. Big deal. Last year, Bill Clinton vetoed a $700 billion tax cut. And once the Senate tax bill goes to conference with the House, it's sure to be back up there where Bush wants it. Democrats can't fight Bush's tax cut with nothing but an admonition that it's "too large." They need to put something else on the table that's important to working Americans -- and which won't be possible if the surplus is used for Bush's tax cut. That something is universal health care. Besides, what better time than now to revive the idea of universal health care? There's a huge budget surplus. Meanwhile, the number of Americans lacking health insurance continues to rise (now almost 43 million, up from 38 million ten years ago). And those who have it are paying more than ever in co-payments, deductibles, and premiums. About 28 million households now spend more than 10 percent of their pay on...

The Wrong War

The Financial Times Like generals preparing to fight the old war, the world's central bankers are still obsessed with inflation. They should be looking forward to the real enemy: deflation. Look around the world and what you see are identical policies in favour of trimming public spending, cutting debt, raising interest rates and squeezing money supply. Euroland has made deficit reduction the ticket to admission. The International Monetary Fund still screams "austerity!" at any hint that capital may flee a developing nation. And in the US, the Delphic and venerable Alan Greenspan, the US Federal Reserve chairman, told the Senate banking committee last month that the Fed would continue to evaluate "whether the full extent of the policy easings undertaken last fall to address the seizing-up of financial markets remains appropriate as those disturbances abate". Translated: If we do anything over the next few months, it will be to raise short-term interest rates. The US bond market...

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