Next Social Contract

The current debate over job creation versus fiscal restraint may prove to be the most decisive debate about America’s future in the post-bubble era. Which side prevails will determine the shape of our economy and society for years to come. Deficit hawks often cite the fear that at some point in the future the market will lose faith in the federal government’s creditworthiness with supposedly severe consequences, but against this distant (and in our view improbable) danger, they tend to ignore the damage caused by the lost output, incomes, and tax revenue that results from weak eco

While the federal deficit captures the news headlines, there is a deep and pervasive fiscal crisis in state finance. This crisis is largely a result of the Great Recession, which has caused the steepest decline in state tax receipts on record. It is also a structural issue, resulting from unfunded retirement plans that are beginning to come due. With state spending accounting for one eighth of US GDP, this crisis has serious implications for economic recovery, for jobs and for the credit markets, where states and municipalities have borrowed nearly $3 trillion.

The Great Recession of 2008-09 has put enormous strain on the social contracts of Western economies. This paper provides an American perspective on how well the social welfare systems of the United States and the European Union countries have performed in cushioning their populations against the economic dislocations associated with the Great Recession and how effective U.S. and European policy has been in softening the severity of the recession and in creating the conditions for future socio-economic progress.

The Great Recession has battered pensions and home values, leaving millions of Americans facing an uncertain retirement. "But attributing this grim situation solely to the recession would be misleading," writes Lauren Damme.

How can Americans recover retirement security, and what role should pensions play going forward? On May 19, the New America Foundation’s Next Social Contract Initiative and the University of California Retirement Security Institute hosted a diverse group of academics, professionals, and policymakers for a forum that sought to identify the “new normal” for retirement security, examine the troubled state of public pensions, and consider best practices for reform.

Can the center in politics ever be radical? One answer was provided in "The Radical Center: The Future of American Politics," a book that Ted Halstead and I published in the fall of 2001.

The welfare reforms of 1996 replaced Aid to Families with Dependent Children (AFDC) with Temporary Assistance for Needy Families (TANF) as the primary safety for the poor. But the Great Recession has exposed the failure of TANF as a safety net to catch American families as they experience hardship.

President Obama has signaled support for putting immigration reform back on the agenda of Congress between now and the midterm elections in November. Whether Democrats on Capitol Hill want to take on such a contentious issue in the aftermath of the healthcare debate remains to be seen. What is needed is not another rush to produce ill-considered legislation on an artificial deadline, but the emergence of a consensus on the principles of sound immigration reform.

This measure creates a financial literacy fund established in the Office of the Treasurer to authorize the Controller to use the fund for financial literacy efforts throughout the state. The fund would provide a funding source for organizations interested in partnering with California to provide consumers with the information they need to make sound financial decisions.

Troy K. Schneider talks with Steven Hill, author of Europe's Promise: Why the European Way is the Best Hope in an Insecure Age, about the cultural and political differences across the Atlantic, and possible takeaways for U.S. policymakers.