I have a new column:
Economic Growth vs. Social Insurance—Why Can’t We Have Both?: Why do Republicans on the campaign trail tend to emphasize policies that are focused on enhancing long-run economic growth while Democrats tend to focus more on immediate problems such as high unemployment? Republicans have a Club for Growth that grades politicians on their support of “free-market, limited government” policies they believe are the key to economic growth. Democrats are more likely to pay attention to institutions such as the Economic Policy Institute where “policies that protect and improve the economic conditions of low- and middle-income workers” are promoted. In general, Democrats seem much more focused on short-run economic problems than Republicans. Is there any basis within economics for this difference in emphasis on which type of policy is most important?
As I’ll explain shortly, there is, or more precisely, there was.
Some Republicans use the promise of economic growth as a ruse for their real goal, lower taxes on the wealthy. For them, it’s really a “Club to Lower Taxes and Cut Social Programs.” But today I want to focus on the economics rather than the politics.
What is the source of the idea that we cannot address both long-run growth and problems such as high unemployment and rising inequality at the same time? Why have economists and politicians chosen sides on which of the two is most important? There are two reasons for this. ...