Honest talk about the deficit is risky. Voters are more enthusiastic about the abstract notion of deficit reduction than about the painful details of accomplishing it. Christina Romer More Quotes by Christina Romer More Quotes From Christina Romer If every other store in town is paying workers $9 an hour, one offering $8 will find it hard to hire anyone - perhaps not when unemployment is high, but certainly in normal times. Robust competition is a powerful force helping to ensure that workers are paid what they contribute to their employers' bottom lines. Christina Romer competition powerful offering Many of my students assume that government protection is the only thing ensuring decent wages for most American workers. But basic economics shows that competition between employers for workers can be very effective at preventing businesses from misbehaving. Christina Romer competition wages government There's a joke in economics about the drunk who loses his keys in the street but only looks for them under the lightposts. When asked why, he says, 'because that's where the light is.' That's the problem with the deficit. Christina Romer drunk light keys You care about the deficit because it allows you to do things you need to do to help people who are suffering. Christina Romer suffering people needs A natural way that an economist approaches a problem is to say, here's where I think the economy is going; this is what we need to deal with the problem. Christina Romer way needs thinking A successful argument for a government manufacturing policy has to go beyond the feeling that it's better to produce 'real things' than services. American consumers value health care and haircuts as much as washing machines and hair dryers. Christina Romer real successful hair As a former member of President Obama's economic team, I have a soft spot for the fiscal stimulus legislation he signed just a month after his inauguration. Christina Romer team months president AS an economic historian, I appreciate what manufacturing has contributed to the United States. It was the engine of growth that allowed us to win two world wars and provided millions of families with a ticket to the middle class. But public policy needs to go beyond sentiment and history. Christina Romer winning class war Climate change and dependence on foreign oil are problems that won't go away on their own. Tabling plans to deal with them doesn't make it easier for companies to plan and invest; it makes it harder. Christina Romer oil climate going-away Cold-turkey deficit reduction would cause a significant recession. A recent analysis by the Congressional Budget Office estimated that going headlong over the cliff would cause our gross domestic product, which has been growing at an annual rate of around 2 percent, to fall at a rate of 2.9 percent in the first half of 2013. Christina Romer turkeys office fall Making labor less expensive helps firms hire people. Christina Romer firm helping people I think something that forces financial institutions to write down underwater mortgages, I think, would be a sensible thing to do. Christina Romer underwater writing thinking What I desire to point out is that I wish the law was not so, but that being the law, I must follow it. Christina Romer law wish desire If increasing income equality is the goal, it might be wiser to put money into infrastructure than to subsidize manufacturing. Construction also pays good wages, but with lower educational requirements. And America's infrastructure needs are enormous. Christina Romer educational goal america In the four decades after World War II, manufacturing jobs paid more than other jobs for given skills. But that is much less true today. Increased international competition has forced American manufacturers to reduce costs. As a result, the pay premium for low-skilled workers in manufacturing is smaller than it once was. Christina Romer skills jobs war Tax increases appear to have a very large sustained and highly significant negative impact on output. Since most of our exogenous tax changes are in fact reductions, the more intuitive way to express this result is that tax cuts have very large and persistent positive output effects Christina Romer impact cutting philosophy I think where I differ a little bit, we absolutely have to think about the deficit looking down the road. And certainly that's something the president has said that we need to, as the economy recovers, have a plan in place for getting it down. Christina Romer president littles thinking The very first email I got [was] from a women's group saying 'We don't want this stimulus package to just create jobs for burly men.' Christina Romer want jobs men Our estimates suggest that a tax increase of 1 percent of GDP reduces output over the next three years by nearly 3 percent. The effect is highly significant. Christina Romer gdp three years Fewer people working means permanently lower tax revenues. Christina Romer taxes mean people
