Contrary to the claims of some politicians and pundits, we can’t cut our way to a strong economy. We need to get our fiscal house in order, to be sure. But we also need to invest in those key areas that can help boost the nation’s growth, which is still the best way to erase the debt. Which is why, in the midst of its fiscal struggles, Congress should move forward on the permanent authorization of a simpler and more generous research and experimentation (R&E) tax credit. Since 1981, the R&E tax credit has helped guard against one of the foremost enemies of innovation: underinvestment.
JARED BERNSTEIN, a Washington wonk and former economic adviser to Joe Biden, recently posed an interesting question. Why is it, Bernstein asked on his blog, that the only part of the government acting with any urgency to ease joblessness—the economic problem affecting the greatest number of Americans—is the unelected Federal Reserve? Bernstein was referring to Chairman Ben Bernanke’s announcement that the Fed would keep interest rates close to zero as long as unemployment remained above 6.5 percent.
IN SEPTEMBER of 2011, a fortyish budget connoisseur named Maya MacGuineas was feeling demoralized. She couldn’t believe that Congress and the president had nearly let the country default on its debt rather than reach a major deficit-cutting deal the previous summer. So she did what she had become unofficially famous for in the wonk circles of Washington: She threw a glamorous dinner party. MacGuineas’s friend, Virginia Senator Mark Warner, agreed to open his Alexandria estate to a coterie of bold-faced names.