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Public good or private wealth?

From Oxfam:

Key recommendations: 

Governments should listen to ordinary citizens and take meaningful action to reduce inequality. All governments should set concrete, timebound targets and action plans to reduce inequality as part of their commitments under Sustainable Development Goal (SDG) 10 on inequality. These plans should include action in the following three areas:

  1. Deliver universal free health care, education and other public services that also work for women and girls. Stop supporting privatization of public services. Provide pensions, child benefits and other social protection for all. Design all services to ensure they also deliver for women and girls.
  2. Free up women’s time by easing the millions of unpaid hours they spend every day caring for their families and homes. Let those who do this essential work have a say in budget decisions and make freeing up women’s time a key objective of government spending. Invest in public services including water, electricity and childcare that reduce the time needed to do this unpaid work. Design all public services in a way that works for those with little time to spare.
  3. End the under-taxation of rich individuals and corporations. Tax wealth and capital at fairer levels. Stop the race to the bottom on personal income and corporate taxes. Eliminate tax avoidance and evasion by corporates and the super-rich. Agree a new set of global rules and institutions to fundamentally redesign the tax system to make it fair, with developing countries having an equal seat at the table.

Public good, not private wealth

The gap between rich and poor is pulling us apart. It stops us from beating poverty and achieving equality between women and men. Yet most of our political leaders are failing to reduce this dangerous divide. It does not have to be this way. Inequality is not inevitable – it is a political choice.8 Concrete steps can be taken to reduce it.

This report focuses on the unparalleled power of universal public services like education and health in tackling poverty and reducing inequality.9 Universal public services are the foundation of free and fair societies. If they choose to do so, governments can deliver life-saving public services for all their citizens.

There is a growing consensus that the wealth of individuals and corporations is not being adequately taxed, and instead taxes are falling disproportionately on working people. For every dollar of tax revenue, on average just 4 cents are made up of revenue from wealth taxes.

The fortunes of the world’s super-rich have grown to record levels. By taxing wealth more fairly, enough money could be raised globally to ensure that every child goes to school and no one is bankrupted by the cost of medical treatment for their families. In doing this, it is possible to build a more Human Economy– one that is more equal and values what truly matters.

Progress in fighting poverty slows dramatically

One of the great achievements in recent decades has been the huge reduction in the numbers of people living in extreme poverty, defined by the World Bank as $1.90 per person per day. Yet new evidence from the World Bank shows that the rate of poverty reduction has halved since 2013. Extreme poverty is actually increasing in sub-Saharan Africa. This new evidence also shows that much of humanity has barely escaped poverty, with just under half the world’s population – 3.4 billion people – subsisting on less than $5.50 a day, which is the World Bank’s new poverty line for extreme poverty in upper-middle-income countries. The Bank finds that women are more often among the poorest people, particularly during their reproductive years, because of the level of unpaid care work they are expected to do.

This is a direct result of inequality, and of prosperity accruing disproportionately to those at the top for decades. The World Inequality Report 2018 showed that between 1980 and 2016 the poorest 50% of humanity only captured 12 cents in every dollar of global income growth. By contrast, the top 1% captured 27 cents of every dollar. The lesson is clear: to beat poverty, we must fight inequality.
The human cost of inequality is devastating. Today:

  • 262 million children will not be allowed to go to school.
  • Almost 10,000 people will die because they cannot access healthcare.
  • 16.4 billion hours of unpaid care work will be done, the majority by women in poverty.”

Continue reading here.

From Oxfam:

“Key recommendations: 

Governments should listen to ordinary citizens and take meaningful action to reduce inequality. All governments should set concrete, timebound targets and action plans to reduce inequality as part of their commitments under Sustainable Development Goal (SDG) 10 on inequality. These plans should include action in the following three areas:

  1. Deliver universal free health care, education and other public services that also work for women and girls.

Read the full article…

Posted by at 7:57 AM

Labels: Inclusive Growth

Is there a middle-income trap? Singular growth patterns in Panama

From the latest IMF report on Panama:

“In light of Panama’s continually strong growth in recent decades, this paper investigates the relevance of the “middle-income trap” for Panama and its prospects for maintaining strong growth in the future. It finds that following the political stabilization in the 1990s, Panama experienced stellar growth performance that brought it closer to moving from the middle to the high-income bracket. However, international evidence suggests that maintaining high growth rates may prove increasingly challenging for countries at Panama’s current level of income. In this context, the paper argues that Panama’s prospects for maintaining buoyant growth critically depends on continued productivity growth underpinned by comprehensive reforms focused on improving education quality, attracting talent, and continuing to enhance the investment climate.”

From the latest IMF report on Panama:

“In light of Panama’s continually strong growth in recent decades, this paper investigates the relevance of the “middle-income trap” for Panama and its prospects for maintaining strong growth in the future. It finds that following the political stabilization in the 1990s, Panama experienced stellar growth performance that brought it closer to moving from the middle to the high-income bracket. However, international evidence suggests that maintaining high growth rates may prove increasingly challenging for countries at Panama’s current level of income.

Read the full article…

Posted by at 2:40 PM

Labels: Inclusive Growth

Gross National Happiness and Macroeconomic Indicators in the Kingdom of Bhutan

From a new IMF working paper by Sriram Balasubramanian and Paul Cashin:

“This paper examines the origins and use of the concept of Gross National Happiness (or subjective well-being) in the Kingdom of Bhutan, and the relationship between measured well-being and macroeconomic indicators. While there are only a few national surveys of Gross National Happiness in Bhutan, the concept has been used to guide public policymaking for the country’s various Five-Year Plans. Consistent with the Easterlin Paradox, available evidence indicates that Bhutan’s rapid increase in national income is only weakly associated with increases in measured levels of well-being. It will be important for Bhutan to undertake more frequent Gross National Happiness surveys and evaluations, to better build evidence for comovement of well-being and macroeconomic concepts such as real national income.”

From a new IMF working paper by Sriram Balasubramanian and Paul Cashin:

“This paper examines the origins and use of the concept of Gross National Happiness (or subjective well-being) in the Kingdom of Bhutan, and the relationship between measured well-being and macroeconomic indicators. While there are only a few national surveys of Gross National Happiness in Bhutan, the concept has been used to guide public policymaking for the country’s various Five-Year Plans.

Read the full article…

Posted by at 2:35 PM

Labels: Inclusive Growth

Housing View – January 18, 2019

On cross-country:

  • London, New York and Hong Kong Are No Longer Immune to Global Housing Downturn – Bloomberg
  • Global Housing and Mortgage: Outlook 2019 – Fitch Ratings

 

On the US:

 

On other countries:

 

On cross-country:

  • London, New York and Hong Kong Are No Longer Immune to Global Housing Downturn – Bloomberg
  • Global Housing and Mortgage: Outlook 2019 – Fitch Ratings

 

On the US:

Read the full article…

Posted by at 6:35 AM

Labels: Global Housing Watch

Public Debt Through the Ages

From a new IMF working paper by Barry J. Eichengreen, Asmaa A ElGanainy, Rui Pedro Esteves, Kris James Mitchener:

“We consider public debt from a long-term historical perspective, showing how the purposes for which governments borrow have evolved over time. Periods when debt-to-GDP ratios rose explosively as a result of wars, depressions and financial crises also have a long history. Many of these episodes resulted in debt-management problems resolved through debasements and restructurings. Less widely appreciated are successful debt consolidation episodes, instances in which governments inheriting heavy debts ran primary surpluses for long periods in order to reduce those burdens to sustainable levels. We analyze the economic and political circumstances that made these successful debt consolidation episodes possible.”

From a new IMF working paper by Barry J. Eichengreen, Asmaa A ElGanainy, Rui Pedro Esteves, Kris James Mitchener:

“We consider public debt from a long-term historical perspective, showing how the purposes for which governments borrow have evolved over time. Periods when debt-to-GDP ratios rose explosively as a result of wars, depressions and financial crises also have a long history. Many of these episodes resulted in debt-management problems resolved through debasements and restructurings.

Read the full article…

Posted by at 10:50 AM

Labels: Macro Demystified

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