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Rebuilding the Public Sector for Economic Recovery and Resilience
Paper for Groundwork Collaborative: full version here.
Executive Summary
As the country crests the most devastating wave yet of the COVID-19 pandemic, there is growing optimism that the new administration will act quickly to stem the economic crisis: both by deploying the federal government’s leadership to control the pandemic itself and by using the federal government’s fiscal capacity to mitigate the economic damage caused by the public health crisis.
The Biden administration will need to turn around both of these failures quickly in order to prevent further catastrophe for millions of Americans and a sustained recession. But the disaster unfolding now is not just a result of policy failures over the past eleven months; it is the result of decades of disinvestment and austerity, accelerated during the Great Recession, which made us more vulnerable to this crisis. Local, state, and national austerity set the country up for a harsh, prolonged, and profoundly unequal recession. We face a pivotal moment now: we can repeat those mistakes, leaving us more vulnerable to future crises, or we can build back our public sector to make us more economically resilient.
It is certainly bad luck that the long-predicted1 economic downturn was sparked by a pandemic, but our failure to meet this crisis with an effective public response is the outcome of years of deliberate policy choices. The austerity implemented after the Great Recession decimated both our ability to weather an economic downturn and our ability to handle any crisis requiring a strong public response. Long before COVID-19 emerged, many experts predicted that the next economic downturn would be unnecessarily long and harsh because of choices we failed to make in the wake of the Great Recession.2 Insufficient financial regulation, continued tax breaks for the wealthy, public spending cuts, weakened labor protections and other policies have weakened our economy, exacerbated inequality, and increased economic instability, making us more prone to damaging recessions.
Rebuilding the Public Sector for Economic Recovery and Resilience
Paper for Groundwork Collaborative: full version here. Executive Summary As the country crests the most devastating wave yet of the COVID-19 pandemic, there is growing optimism that the new administration will act quickly to stem the economic crisis: both by deploying the federal government’s leadership to control the pandemic itself and by using the federal […]
California can’t afford to repeat the Great Recession: State spending is critical to economic recovery
California’s 2021-22 budget will have an enormous impact on the nature of California’s recovery from the COVID-19 pandemic. The Governor’s 2021-22 budget proposal would restore some critical funding for public health and education, but it will not be sufficient to get California’s economy and low-income Californians back on track. To avoid a prolonged economic downturn, […]
Public spending must support everyone, not just the rich
Written on the occasion of Biden’s inauguration:“Americans occupy increasingly separate economic spheres. Each year, more Americans struggle to afford housing, access quality education, pay for health care, and retire above poverty. A majority of Americans lack enough savings to weather a short spell of unemployment or a costly car repair. Our schools are more economically […]
Incentives and Austerity: How Did the Great Recession Affect Municipal Economic Development Policy?
How did the recession affect the more entrepreneurial functions of the local state? Economic development was one of few areas of discretionary spending that local governments could cut or defer in response to mid-budget cycle revenue shortfalls. Did cities maintain or alter their approach to facilitating private development in the years following the crisis?
October update: Public sector impacts of COVID-19
Update of my July data brief on the public sector impacts of COVID-19, with October data
Public Sector Impacts of the Great Recession and COVID-19
This brief summarizes the Great Recession’s impact on public employment and the public sector job losses driven by the COVID-19 pandemic in 2020. Our analysis points to the importance of focusing on the public sector as policymakers respond to the COVID-19 crisis.