Jason Furman, President Barack Obama's chief economic adviser, delivered a speech at the University of Wisconsin-Madison Monday, in which he discussed his three goals for achieving successful American fiscal policy.
These goals include returning the economy to its full potential, expanding its competency more quickly and reducing the gap between the government’s spending and total revenue.
Furman said his first order of business is bringing down the unemployment rate, which he noted is currently improving.
The success of the economy growing more rapidly depends on economic inequality, Furman said. Inequality influences a slower productivity rate in the economy. He added the percentage of income wealthy United States citizens hold is the largest percentage share of income since 1928.
Furman also said the national debt will stabilize over the next 75 years if the difference between government spending and its total revenue is 1.7 percent of the gross domestic product. Attaining this percentage is more manageable than many people assume, according to Furman. He said there is a huge amount of uncertainty about this percentage, but regardless the outlook, it looks better than it has in the past.
According to Furman, Obama’s policies are a good framework for reducing the fiscal gap. Furman said programs like the Affordable Care Act will help decrease the deficit.
“The Recovery Act is a fiscal policy that helped make sure that the United States did not go into a second depression,” Furman said.
Furman said the biggest challenge is not figuring out fiscal policies to help the United States economy, but actually getting them through Congress and Washington.
However, Fanny Moffette, a Ph.D. candidate in UW-Madison’s Agriculture and Applied Economics Program, said she “expected much more from the lecture.”
“The inequality issue [in the United States] is more than a matter of productivity, it is a matter of creating less poor people and a bigger middle class,” Moffette said.
