Event Recap: The Atlantic Economy Summit
The Atlantic held its 2013 Economy Summit yesterday, featuring more than twenty-four speakers on tax reform, the future of entitlement programs, and the role of debt and deficits in current policymaking. Experts from a wide range of different perspectives discussed how to deal with our debt and boost the economic recovery, arguably the two greatest challenges for policymakers today.
The first panel featured speakers with differing perspectives on debt, deficits, and policy solutions to our economy's biggest issues. The panel included Craig Alexander from TD Bank, Robert Kuttner from the American Prospect, Paul McCulley of the Global Interdependence Center, Yves Smith, publisher of Naked Capitalism, and Maya MacGuineas, President of the Committee for a Responsible Federal Budget. Some panelists argued that dealing with the big drivers of the debt may be distracting attention from the other goal of creating new jobs in a fragile economy, while others argued that the two objectives were not mutually exclusive, if deficit reduction was done in the right way and on the right timeline. CRFB President Maya MacGuineas explained:
Passing sound fiscal policy would add something we don’t currently have: stability in the economy. Healthcare and Social Security are things that people plan for, and so if we continue to say ‘yes, we know these things need to change’, but then can’t give the specifics of what that change is, we will do more damage. It would be helpful to pass policies now, so that we have time to phase them in in a gradual way.
On the timing of deficit reduction, MacGuineas said: "We can’t destabilize an already weak recovery, but we also can’t short change the future. We think using a mid-term timeline, probably about a decade, for these policies to begin taking place, is probably the right way to think about this." Alexander echoed the sentiment that there may be ground in the middle, saying "you can’t live beyond your means forever and expect nothing to happen."
In a conversation with The Atlantic's Senior Business Editor Derek Thompson, Alice Rivlin emphasized that deficit reduction should focus on coming up with a plan for changes further down the road, so people can plan for them. She gave the example of Social Security’s insolvency:
Social Security will take a big hit in 2033, and for the people in their forties currently, 2033 is going to be when they retire. And they need to know that Social Security will be around and strong for them. We need to do this also to reassure ourselves and the world that we’re serious about our fiscal house, and secondly, these programs, which are really important, we need to put on strong footing.
Such a long-term plan could yield immediate benefits as well. Former Treasury Secretary, Robert Rubin claimed that phased-in deficit reduction enacted gradually could have a positive short-term effect, spurring job growth and investment, as a result of increased confidence in our fiscal outlook and ability to govern.
While political perspectives varied throughout the day, speakers at the Economy Summit commented widely that our current fiscal environment holds room for improvement in managing major areas of the budget, including the tax code and management of major entitlement programs. When asked about sequestration, many speakers also held the view that while the across-the-board cuts constitute poor deficit reduction policy, $85 billion in cuts is more favorable than nothing at all. But there is clearly much more we could be doing that would help both the economy and make our budget sustainable.
Although video of the event is not currently available, it should be up here soon.