by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
“Economic growth, while necessary, is insufficient to address many of the challenges of our 21st-century economy,” Abby McCloskey writes in National Affairs. She offers some policy suggestions to improve connections in community, make work pay, and reform entitlements to improve government finances. I don’t endorse all of them, but they raise important issues.
To address community, McCloskey recommends making the charitable deduction available to more taxpayers and subsidizing a period of voluntary national service.
The national service option could also help more people work. So would a “rethought work credit…delinked from family structure,” thus eliminating the marriage penalty. Government could provide a subsidy to bring wages up to $15 an hour instead of imposing the cost of a higher minimum wage on employers or offering a Universal Basic Income. She would offset the cost with reductions in the tax benefits for home mortgage interest, employer-provided health insurance, and graduate school tuition.
The biggest challenge she tackles is entitlements, beginning with an endorsement of Simpson-Bowles proposed reforms. McCloskey suggests replacing Social Security Disability Insurance with a short-term medical leave program and taking other steps to base Social Security payments “on need rather than age.”
I disagree with some of the recommendations, but they at least try to address the key issues of entitlements, work, and community.