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4 The legal question to be resolved by the court is whether the word "should" 13 in the May 18 order connotes futurity or may be deemed a ruling in praesenti.14 The answer to this query is not to be divined from rules of grammar;15 it must be governed by the age-old practice culture of legal professionals and its immemorial language usage. To determine if the omission (from the critical May 18 entry) of the turgid phrase, "and the same hereby is", (1) makes it an in futuro ruling - i.e., an expression of what the judge will or would do at a later stage - or (2) constitutes an in in praesenti resolution of a disputed law issue, the trial judge's intent must be garnered from the four corners of the entire record.16

Footnote 13:

1. Expert overreach – government reforms plans based around IMF expertise¶ While none of the climate-related conditionalities listed above are obviously wrong, there is evidently a strong bias towards reform measures that are closely related to traditional IMF areas of expertise. Financing strategies, public investment management, public financial management: this is all familiar terrain for the IMF. While finance and financial reforms obviously matter for resilience and sustainability, it is not the case that they are the measures that matter most. Should a government prioritise investment in a pandemic-preparedness budget code? Or in improving genomic sequencing?¶ This matters because institutional reforms are not without their costs and IMF conditions can influence overall government reform agendas. There is a danger that governments prioritise measures based on what the IMF happens to be good at, rather than a solid analysis of the most pressing vulnerabilities.¶ 2. Too much from too few – overburdening central finance and planning agencies¶ Reforms do not happen in isolation, and someone needs to actually implement them. The proposed RST measures will mostly need to be executed by the same central finance and planning agencies that serve as the main counterparts to IMF surveillance and capacity-building work. Chart 1 shows the number of conditions that have already been agreed through 2021 conditionality programmes. RST conditions will be additional to this.¶ As a result, for many countries the same small group of civil servants working in the same key ministries will now be asked to implement simultaneous economic, fiscal, financial and budget policy reform at a time of economic crisis. There is a clear risk that such reforms could actually hinder state capabilities by adding to the kind of ‘premature load bearing’ or isomorphic mimicry that undermines real institutional reform.¶ The Seychelles provides an example. Over the next three years, 14 structural conditions have been agreed with the IMF and a further 16 with the World Bank through its Fiscal Sustainability and Climate Resilience Development Policy loan. If the Seychelles wishes to access funding from the RST, it will have to commit to addressing further climate and pandemic resilience reforms. This is a tall order for a country of 100,000 people. Will the additional measures support resilience, or prevent people from doing their day job?¶ 3. The wood is the trees – visible reforms are not necessarily the most important ones¶ The RST approach implicitly assumes that there is a distinction between public policy reforms that support climate and pandemic resilience and other good public policy reforms. In practice, this is a difficult – if not false – distinction. Resilient states are those with effective public policy processes across the board. Such states can mobilise money, people and equipment to deal with a range of crises, because their public policy processes are well-developed. Opening up the public policy machine to strengthen those sub-circuits that are ‘climate-related’ and ‘pandemic-related’ while ignoring the rest is conceptually difficult and arguably counter-productive.¶ This can be seen in many of the sample institutional reform conditions listed in the Board Paper. These are effectively ‘climate add-ons’ to processes that (should) already exist. If these processes are working well, adding a climate element will certainly help them do better. If they are not working well – not inconceivable in the countries most likely to access RST finance – then adding a ‘climate dimension’ could lead to nothing more than a box-ticking exercise, with reams of additional published guidance but little substantive impact.¶ Figure 1 illustrates various fiscal management reforms that could conceivably promote resilience. There is a danger that the RST selects reforms based on whether they can be visibly linked to the specific challenges of climate and pandemics, while neglecting potentially more useful reforms that can strengthen government capabilities more generally.¶ 4. Do as I say, not as I do – the credibility risk in stoking confrontational climate politics¶ Adding a more explicit climate dimension to the IMF’s conditionality threatens to raise the heat on complex issues of international and intergenerational equity. An institution that must be seen to be neutral and technocratic (at least to some degree) could therefore be dragged into some politically-charged debates.¶ The developed countries that have contributed the most to climate change are aiming for net-zero emissions targets or similar by 2050 or later. For them, climate mitigation is an ongoing policy agenda for which the costs will be paid over the medium- to long-term. In contrast, for RST borrowers, many of these costs must be paid right now through policy conditionality.¶ More controversially, all the resilience and preparedness reforms in the world will not prevent some countries – notably small island states – from suffering periodic natural disasters, nor will they push back rising sea levels. Implying that countries need to be a bit more ‘resilient’ in these circumstances risks blaming the victim.¶ This will be particularly galling if the governments of high-income countries start scoring their contributions to the RST as ‘climate finance’. Sceptics might start to question who is really benefiting from these tough and controversial climate-related conditions. In the most cynical view, RST donors could be accused of simply using the excess reserves generated through the SDR issuance to hit their international climate finance commitments and avoid the real fiscal cost of providing upfront grants rather than SDR-backed loans.¶ What can the IMF do?¶ Supporting climate and pandemic resilience – however defined – is a worthy goal, and the IMF now has $40 billion in loans to promote it. However, it has been handed something of a poisoned chalice with which to implement this system. How much does it want to drink? There are several options for a remodelled RST: some could be pursued jointly, while others would require a more fundamental rethink of the current structure.¶ 1. Acknowledge limits and recognise these challenges up front¶ The limits of IMF expertise in this area should be acknowledged. It should be made clear that they are not experts on climate change or pandemics. Their most relevant experience is thinking in broad terms about what qualities make governments resilient to macro-fiscal shocks. Expectations that RST-based policy conditionality will markedly change overall country resilience to specific pandemic and climate shocks should be toned down to a realistic level. In designing policy conditions, the IMF should interpret resilience and state capability broadly. The IMF should recognise that there are multiple ways to achieve this and could usefully spell out their assumed ‘theory of change’ in doing so.¶ The IMF should also be much more vocal about what can realistically be done to manage climate and pandemic risks through the design of country-specific conditions. Needless to say, climate change and unexpected pandemics are global issues that no individual country can realistically solve alone. The IMF should be clear about the global systemic issues that contribute to country vulnerability. It should deploy research and evidence to make the point that RST countries are not typically the countries that undermine the sustainability of the global commons.¶ 2. A strong all-rounder – use the RST to build states that are resilient to multiple shocks¶ During the Covid-19 crisis, many of the most critical capabilities for dealing with the impact of the pandemic related to broader-based qualities of public administrations. As shown in Figure 1, for finance ministries, these included having access to real-time data and appropriate debt instruments; being agile in forecasting and procurement; and adapting rules to reflect emergency circumstances. These are useful instruments for responding to many kinds of shocks, and all of them are to some degree the responsibility of finance and/or planning ministries.¶ If the IMF wants to impose climate and pandemic resilience conditions, it should work in these areas of financial and economic management capability that already have a demonstrable relationship to concepts of ‘resilience’, and which clearly fall within its mandate. This may result in a list of conditionality reforms that are similar to its existing set of standard policy and institutional reforms, but ‘sticking to what you know’ might make sense for a reform agenda that aims to build resilience across the whole of government.¶ 3. Less is more – maintaining policy conditionality at a minimum¶ The IMF should be parsimonious in selecting policy conditionalities relating to the RST. More measures do not necessarily mean more of a good thing. Indeed, the IMF itself has broadly recognised this point through its commitment to reducing and streamlining conditionality throughout its programmes. If the IMF intends to encourage governments to undertake significant new activity to deliver climate or pandemic-related resilience reforms, they should also provide advice on what governments should be doing less of to compensate.¶ 4. Keeping the peace – avoid tying the most controversial mitigation actions to the RST¶ Climate change mitigation is perhaps the most controversial area of policy reform. Asking lower-income countries to impose new climate taxes and/or remove popular-but-polluting subsidies can be justified where they relate to immediate-term fiscal sustainability. They are significantly more difficult to justify when demanded by an institution controlled by the higher-income countries that have contributed most to climate change. In the wrong light, this makes tough love look more like a punishment beating.¶ To avoid this, the IMF should only tie strict RST climate mitigation conditions to a policy that a recipient government has already planned. Governments can therefore use the IMF’s conditionality to strengthen their hand in tackling (likely unpopular) policy reforms they have already committed to, while avoiding the legitimacy-draining effect of being forced to undertake policy reforms that appear to be imposed from outside. This will go a long way to preventing acrimonious disagreement about the international and intergenerational equity of the RST, and the IMF’s role in implementing it.¶ Proceed with caution¶ In practice, the reputational and relationship risks facing the IMF as a result of the conditionality, policy focus and change in mandate inherent in RST may not matter much. The RST is only available to IMF programme countries, and most countries will move heaven and earth to avoid becoming one. For those countries on an IMF programme, the volume of funds available through the RST will only be a partial restorative to the immediate macro-fiscal problems that they and the IMF are trying to fix. Therefore, while the policy goals of the RST are certainly laudable, their actual impact may be more limited. This may save the IMF from many awkward conditionality conversations.¶ In entering the world of climate and pandemic resilience conditionality, however, the IMF is stepping well outside its comfort zone. This could be just the beginning. The move opens up a range of relationship risks that could have lasting implications for the IMF’s reputation and its working practices with client countries. This matters, as the world needs a ‘lender of last resort’ that is perceived by its creditors and borrowers to be (at least minimally) expert, neutral and fair. Some challenges could be overcome through a more careful design of the RST and its evidence base. Others are hardwired into the concept itself. The IMF should proceed with great caution as it involves itself in the business of supervising the behaviour of countries outside its usual home turf.

The joint empirical analysis of the relative redistributive performance of a UBI, existing social safety nets and available financing options is powerful in highlighting the tradeoffs faced by policymakers when assessing social spending programs along key dimensions: i. coverage at the bottom of the income distribution vs. leakages to richer households, ii. generosity of transfers vs. incentives and economic distortions, iii. fiscal cost vs. alternative use of scarce fiscal resources. The fourth aspect that weighs heavily in shaping policy choices is how to reconcile objectives and implementation challenges. 22 The saliency of each of these tradeoffs depends on each country specific circumstances, in particular on its position in the coverage/generosity/progressivity space (Figure 2), its capacity to raise resources in a progressive and sustainable manner and the ability to roll out a (more or less) complex program. Social preferences, together with constraints, determine how these tradeoffs are called. The relevance of these tradeoffs and the design of a transfer program has implications that go beyond the performance of the specific scheme. They are related to and impact how a country overall benefit-tax system affects individual behaviors,27 bearing far-reaching implications for labor market, consumption and investment decisions that will in turn impact back the fiscal sustainability of the tax-and-transfer system. As mentioned, inefficiencies (e.g., disincentives to work) are relevant issues also under existing safety nets—that are rarely universal and unconditional—and their current financing mechanism. For this reason, a broader discussion is needed, that would move beyond just looking at UBI in isolation to assessing whether a policy package encompassing a UBI would increase or decrease the distortionary impact of government policies and or improve/reduce the performance of a safety net. As important is the thorough assessment of implementation capacity both for targeted and universal type of programs. In short, efficiency and equity impact of a UBI cannot be gauged in isolation. Beyond the discussion presented in this paper and short-term considerations, other issues also point to the usefulness of broadening the horizon when discussing universal programs and looking for ways to make social protection systems adequate for facing future challenges. For example, in an economic environment where job security decreases and income volatility increases, expanding available insurance mechanisms for those who are out of work may become an important policy objective; similarly, where there is a need to generate public support while protecting vulnerable households from undesired side effects of structural reforms that impact large segments of the population. protecting vulnerable households from undesired side effects of structural reforms that impact large segments of the population.

The International Monetary Fund (IMF) and the United Nations (UN) have produced two publications that bring these issues of pervasive poverty in America to light. In June 2016, the IMF cautioned Americans about the high poverty rate and urgent need to raise the minimum wage, and the need for improving labor market conditions by promoting jobs with fringe (health and vacation) benefits. In December 2017, the UN reported on extreme poverty in the United States, and strongly condemned the unprecedented growth of private wealth and the propagation of homelessness and pervasive poverty. The report when as far as declaring the state of Alabama to have the "worst poverty in the developed world" and depict similar characteristics to the poverty levels experienced in developing nations. The UN report highlights that over 40 million people in the US live in poverty and over five million live "in ‘Third World’ conditions." All these poverty indicators are growing while the growing income disparity and technology gaps keep widening (Chuang,1998) and adding to wage gaps by gender and race. Given this assortment of additional information, policymakers should not rush to claim victory and assume that the economy has already reached full employment and a well-balanced growth pathway. It is not until all Americans enjoy a prosperous future and poverty is eradicated that we can be satisfied. Rather, policymakers should pursue policies that attempt to push for tighter labor markets until wage growth picks up, the working poor disappears, and poverty and income inequality are eradicated. In the past, poverty reduction strategies rely heavily on policies that pivot around progressive tax rates, workforce development programs, and welfare programs, but have been mildly successful in terms of assisting the population that needs the most and breaking away from the poverty cycles. All these policies in conjunction had not significantly increased the labor force participation rate which has remained at a historical two-decade low of about 63 percent (Bullard, 2014). Page 4/24 Our proposal demonstrates that when conducting a well-orchestrated FJG, the cost of implementation could be as low as 27-28 percent depending on the scenario. More importantly, the gains in terms of tangible and intangible benefits to the most vulnerable members of our communities are significantly higher in the long run. The FJG has the potential of breaking the poverty cycle definitively.

Engagement on macro-critical SSN [Social Safety Net] issues in the surveillance context should be driven by an integrated assessment of the potential impact on macroeconomic stability. An issue or policy would be considered critical to bilateral surveillance and warrant IMF engagement if it affects or has the potential to affect domestic (for example, growth, inflation, fiscal sustainability), external, or global stability.15 This assessment should be risk-based, and the depth and breadth of engagement need to balance the level of risk and macro-criticality with the urgency of the issues and internal resources available. Staff should also routinely assess whether economic and social developments, new events (for example, pandemics and disasters), and material changes to the SSN system (affecting adequacy, efficiency, and sustainability of the system) may raise new policy concerns that warrant engagement. SSN analyses should not be limited to short-term considerations and may require a long-term approach. This would help take into account the long-term impact of SSN spending and reforms on, for example, macroeconomic performance, human capital formation, and income distribution. Certain structural developments (for example, population aging and labor market developments) may also require a long-term view about the effect on and the role of SSN programs.

He previously covered taxes for The Hill, and was an editorial assistant for The New York Times in Washington.¶ The International Monetary Fund is suggesting countries examine a range of new tax policies to combat the rising inequality it says can be a drag on global economic growth.¶ The IMF, which has increasingly concentrated on income inequality in recent months, makes clear that it’s not making policy prescriptions on how to deal for the issue for either advanced or developing economies. ¶ But the IMF paper also insists that there are ways to battle inequality, and redistribute income, while also having positive effects on growing the economy and the job market.¶ “When it comes to fiscal redistribution, design matters,” David Lipton, the IMF’s first deputy managing director, said in a statement. ¶ “Redistribution, if poorly designed, or pushed too far, can be distortive,” he added. “But some redistributive fiscal policies can in fact help improve efficiency and support growth, such as those that enhance the human capital of low-income households.”¶ The paper comes as the IMF has also become a lightning rod in Congress, and a central part of the debate on a potential aid measure to Ukraine.¶ It also comes just weeks after the IMF released another paper detailing the problems that income inequality –which Democrats have made a key part of their political message in recent years –can cause for the global economy. ¶ Still, some of the policies the IMF suggests deserve a deeper look are often scoffed at in the U.S., especially by Republicans.¶ The IMF paper, for instance, says that a carbon tax could be an “innovative” approach, and suggests that a top income tax rate higher than the U.S.’s current 39.6 percent might be optimal for raising revenues. ¶ The paper also calls for countries to reassess their roster of tax breaks, and to more effectively tax multinational corporations. ¶ On the spending side, it suggests increasing the retirement age, an idea that Democrats have panned, and for increased access to education.

The IMF’s new Resilience and Sustainability Trust (RST) is now up and running, with the first countries receiving commitments of financial support. But if lending from the RST is to achieve its objectives, the IMF should take a radically different approach in applying conditions to the loans. ¶ The Resilience and Sustainability Trust was agreed formally in April 2022 and became operational in October as the IMF firmed up financial contributions from donors and then negotiated policy programs under the new Resilience and Sustainability Facility (RSF) that is funded by the RST. First recipients include Costa Rica, Barbados, Rwanda, and Bangladesh, all approved by the IMF Board, and Jamaica, which will go to the Board soon. Getting this far is a major accomplishment. But what comes next—including the approach to conditionality—will be crucial to determining whether this initiative is ultimately a success. ¶ As the IMF sets the conditions that countries must meet to secure the unusually long-term RSF loans, “business-as-usual” conditionality is not fit for the ambitious purpose “to help countries build resilience to external shocks and ensure ZXX.” The IMF’s approach must adapt in three main ways if the RSF is to be effective and countries are to receive the support they need to build resilience. First, conditionality should incorporate a new mechanism for transparency covering a broad range of country policies. Second, specific conditions for RSF disbursements should focus much more narrowly on a few policy actions that the IMF has expertise to design and monitor. Finally, the design of RSF conditionality should be fully integrated with enhanced responsibilities of the IMF and other institutions for advice and monitoring to meet national and global goals.¶ What we know so far about RSF loan conditions¶ Some aspects of the IMF’s approach to RSF conditionality are already clear, together with their drawbacks.¶ First, at creditors’ insistence, RSF disbursements can only be made when the borrowing country has a regular IMF program or credit line in place. Moreover, no disbursement will be made on initial approval of the program but only following subsequent implementation of agreed structural reforms and only if the IMF program is on track. The concern is that countries facing existing balance-of-payments problems might try to avoid the typical conditions under a regular IMF program by “facility shopping”—accessing RSF resources with conditions aimed solely at dealing with prospective balance of payments problems. However, requiring concurrent programs means countries might delay seeking IMF support to tackle immediate macroeconomic problems, because of stigma or failure to secure political consensus. This would then also delay the urgent task of beginning to tackle the prospective problems of climate change and other major structural challenges, which has both local and global benefits. For this reason, we have advocated allowing some limited access (25 percent of IMF quota) to the RSF without a concurrent IMF program: an issue that could be revisited at the time of the first review of the Trust’s operations. Financing from the RSF is in any case limited, with the bigger prize coming from the urgent focus on ambitious policy reform that can catalyze much larger private and official investment.¶ Second, the emphasis is unsurprisingly on structural policies, yet the tensions long-since evident in applying IMF conditionality to meet structural problems are magnified in the design of the RSF. The danger is that the RSF conditionality based solely on IMF-monitored implementation of structural measures increases the likelihood that the IMF will overpromise and underachieve in its bid to bolster countries’ long-term resilience and sustainable growth. In particular, designing conditions to meet long-term structural problems presents unique challenges. Agreements on urgently needed policies lack traction because (i) formulation and implementation depend on agencies beyond the traditional IMF counterparts in a country’s finance ministry and central bank; (ii) financing requirements are enormous and far outweigh what the IMF can provide; and (iii) the collective impact will not in any case be fully known for a generation. Two underlying institutional weaknesses at the local and global level further complicate matters. National governments face difficulties to specify the policy actions most important to achieving long-term objectives, while strengthening the processes to implement them both during and after the program period. In addition, the framework of international cooperation lacks accountability for monitoring policy implementation to meet country commitments to combat climate change, for achieving the global targets, and for assessing the impact on individual countries.¶ Third, RSF disbursements are to be conditioned on a few reforms, in line with IMF guidelines that conditions are supposed to be parsimonious and aligned to country circumstances. However, the announced range of possible reforms is already very wide and disparate in nature, making it hard to evaluate the choice and significance of an individual reform, and stretching the limits of the IMF’s expertise. More will need to be done to erase the specter of unmanageable laundry lists of structural measures that accompanied IMF programs of yesteryear, or the difficulty of justifying why a particular reform merits being chosen as a condition.¶ In the face of these daunting challenges, the IMF seems to be “hoping for the best” by specifying as conditions various useful country-led policy reforms that plausibly contribute to tackling long-term structural problems and prospective balance-of-payments problems. Disbursements fund some new upfront expenditure, but also provide a reserve buffer. This approach amounts to using the RSF to “top up” access to the resources that are provided by the required regular IMF program. It has the advantage of making it easier to service debt that will be due to the IMF and others in the next few years when many RSF-eligible countries face the prospect of debt distress that is heightened by war, pandemic, and climate change, on top of any policy shortcomings. The RST would, in essence, allow a partial rescheduling of debt service falling due to the IMF and others. The temptation to pursue this unstated benefit, however, should not distract from trying to maximize the RSF’s impact on increasing long-term resilience to climate change and pandemics.¶ A more ambitious approach¶ A bolder approach would see the IMF adapting RSF conditionality to greatly increase the chances of achieving the substantive aims of the new initiative. The IMF has a unique opportunity, by leveraging its advice and resources, to help strengthen internal country processes that foster reform as well as improve the flawed system of international cooperation that is far too slow to address the risks posed by climate change and pandemics.¶ The IMF should adapt its RSF conditionality in three ways:¶ 1. The IMF should establish a new mechanism for transparency¶ A new mechanism for transparency could make central—and give greater traction to—the authorities’ statement of policy objectives and actions to achieve them. The traditional policy memorandum—a formal part of any IMF conditionality—would, as usual, enumerate the specific actions that constitute the formal conditions for an RSF drawing. In addition, it would require that the authorities complete and periodically update a broader Resilience and Sustainability Policy Statement (RSPS). This new instrument would incorporate the specific policy actions that are RSF program conditions and would also:¶ describe the timeline of all economic policies to achieve a country’s nationally determined contributions (NDCs) to mitigation, national adaptation plans (NAPs), and other resilience strategies, together with their expected macroeconomic implications;¶ appear online in a format that described which government agency is responsible for which action and which international institution (if any) was responsible for supporting the country’s efforts, allowing progress updates and commentary by those agencies;¶ describe the government’s commitment to allow parliamentary and public debate of their statement, as well as to present it to private investors and international partners at donor conferences.¶ The RSPS mechanism would increase the accountability of domestic and international institutions in their own areas of responsibility; better explain policy direction and help build internal consensus for the actions; and facilitate the IMF’s catalytic role in attracting domestic political support and much larger resource flows from official and private sector sources. Critically, the IMF’s role in preparing the RSPS would be limited but essential: it would provide a template and “metadata” guidance to country authorities on what the statement should include but would not need to approve the language with the authorities, except where a topic directly related to IMF loan conditions. Detailed analyses produced by or with the help of IMF or World Bank staff, such as Climate Change Policy Assessments, Country Climate and Development Reports, Disaster Resilience Strategies, and Public Investment Management Assessments, would provide useful inputs to the RSPS. The IMF, World Bank, and other institutions would be free to comment on the authorities’ RSPS at respective Board meetings, in public, and at the planned donor/private financing meetings. By conveying greater ownership and responsibility to the country authorities, this mechanism would avoid the bureaucratic bottlenecks and misplaced accountability that so bedeviled previous attempts at policy statements submitted to the IMF and World Bank. ¶ 2. The IMF should focus more clearly on a few critical actions that it will help design and monitor as loan conditions¶ These “IMF-focused” priority actions—some of which would constitute RSF conditions—should include: ¶ the path for carbon pricing (or equivalent regulation), including eliminating subsidies and imposing taxes, to deliver on their national targets and anticipate a world in which higher relative prices of greenhouse gases are set globally that affect the country’s trade, investment and consumption patterns;¶ incorporation into the medium-term budget (through impact on public sector expenditure and revenue) the many specific actions required to meet the country’s NDCs and NAPs and support for the most vulnerable, and to increase pandemic preparedness;¶ as a priority action for all gas- and oil-producing countries, levying default penalties on deemed methane emissions with the rebates allowed on verifiable satellite-based data. Curtailing methane emissions is urgent, both for local benefits of health, revenue generation, and energy access, as well as for the global benefit of slowing temperature rise; and¶ stress-testing of institutions and the overall financial system as well as adoption of guidelines on reporting and disclosure by banks and financial institutions of climate-related risks.¶ The authorities’ policy memorandum would explain what they are planning to do—or not to do—in each of these key areas monitored closely by the IMF. The memorandum would also make explicit the quantitative target path for a country’s reserve buffer to increase resilience to future shocks. (Concurrently, the IMF should continually update its policy advice on the desirable level of reserve cover to increase resilience to shocks.) By providing explanations, the authorities would increase transparency about their actions and spur domestic debate and consensus on what can at times involve difficult policy trade-offs. ¶ 3. The IMF should integrate its RSF work into its broader responsibilities by expanding its surveillance and advisory roles¶ Since meeting the goal of the RST depends greatly on the policy actions of all IMF members, including the largest economies, the IMF should integrate its RSF work into its broader responsibilities by expanding its surveillance and advisory roles. Meeting head-on the urgency of its global obligations for macroeconomic stability and prosperity as member countries face increasing threats to lives and livelihood warrants:¶ introducing the proposed RSPS mechanism as a tool to be part of IMF Article IV consultation discussions with all member countries, including the largest economies;¶ as input to the discussions, developing a Resilience and Sustainability Assessment Program (RSAP), akin to the Financial Sector Assessment Program (FSAP), with a piloted then targeted approach to work with the largest economies as well as those most vulnerable; and¶ conducting regular aggregate assessments of the implications for economic policies and consequences of the entire membership’s commitments to tackle climate change and pandemic preparedness– a role the IMF can uniquely play. The findings would be conveyed to other elements of the UN system charged with building consensus and delivering action, to strengthen the accountability of the complex existing arrangements for international cooperation.¶ A forthcoming note sets out in greater depth what has so far emerged about IMF policy toward RSF conditionality; explains the mismatch between the emerging conditionality and what is required to meet the need that the RST is designed to help countries face; and makes specific suggestions to adapt its approach to conditionality in the three areas noted above, with the aim of making the most of the IMF’s new initiative.

Title: Finally, we have a true shot at bipartisan Social Security reform

Pronouncements from both sides of the aisle that we must “protect” Social Security from any fiscal reforms obscure a hard truth: A vote for the status quo is a vote to cut benefits by nearly a quarter for every single beneficiary starting in just over 10 years.

Perhaps the most fundamental trend is related to one’s placement on the political spectrum. There is strong opposition (78%) to an unconditional, universal cash transfer of $1000/month among Republicans while the majority of Democrats (66%) are supportive of this proposal. However, the results from both parties also vary according to age, race, and income level. Although most Republicans in all age groups oppose UBI, 41% of Republicans aged 18 to 34 favor it. We also see the same trend among Democrats: adults 18 to 34 show much higher support than older people. Moreover, income level seems to be highly influential for both parties. Forty-three percent of Republicans with low incomes favor UBI, while support sharply decreases to 17% for middle income groups and 8% for higher income Republicans. While there is a similar trend among Democrats, overall support for UBI is much higher. We also see racial differences among Democrats. Again, the majority of Black and Hispanic Democrats support UBI (77% and 70%, respectively), compared to 61% of White Democrats (Gilberstadt, 2020).

In order to stem the economic calamity of the pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, a $2.2. trillion economic emergency stimulus package which included a one-time guaranteed income payment of $1,200 to most adults (U.S. Department of Treasury, 2020). The CARES Act also temporarily expanded unemployment benefits to include gig workers, who, with the fissuring of work, have become an increasing portion of our workforce; along with a $600 universal increase for recipients of unemployment compensation. These key provisions, even despite their shortcomings, illustrate our government’s potential to address poverty rates and growing economic insecurity. As Congress deliberates future interventions of COVID-19 relief, we should be wary of policies aiming to return to pre-COVID-19 rates of poverty and economic insecurity. Millions of Americans were struggling well before the pandemic hit. Instead, we should recognize the government’s capabilities of rapidly responding to and protecting against economic hardships with guaranteed income supports and carry this understanding with us far after the threat of COVID-19 ends.

A majority of voters believe the government should have a universal basic income program, up from 12 percentage points in 2019, a new Hill-HarrisX poll finds. Fifty-five percent of registered voters in the Aug. 2-5 survey were in support of universal basic income, while 45 percent were not. The Hill-HarrisX poll found support for the program has gradually grown in the past year. In a February 2019 survey, 43 percent of voters said the government should have universal basic income and in a September 2019 survey, support grew 6 percentage points to 49 percent. <<<graph redacted>>> The survey found an increase in support across demographic groups, primarily among younger voters and Democratic voters. Sixty-nine percent of voters ages 18 to 34 and 35 to 49 were in favor of universal basic income, a 14 percentage point and 16 percentage point increase, respectively. Support has not yet reached the majority among older voters in the survey, however, it grew from 21 percent in February 2019 to 34 percent in August 2020 among voters 65 years old and beyond. Seventy-one percent of Democratic voters and 56 percent of independent voters believe the government should have a universal basic income program, a 15 and 12 percentage point increase from last February, respectively. Among Republican voters, support grew from 27 percent last winter to 34 percent support in August 2020. The proposal has gained momentum since former White House hopeful, Andrew Yang, made universal basic income the primary focus in his presidential campaign. The program has garnered enough traction to inspire global basic income marches, with the second annual march set to occur this fall. The Hill-HarrisX poll was conducted online among 2,850 registered voters between Aug. 2 and 5. It has a margin of error of plus or minus 1.84 percentage points.

David, “Republicans Against Inequality,” June 20, 2023 . dmr

A rising generation of Republican politicians is more skeptical of the free market and more comfortable using government power to regulate the economy than the party has traditionally been. Consider: Senator J.D. Vance, the Ohio Republican, and Senator Elizabeth Warren, the Massachusetts progressive, have collaborated on a bill to claw back executive pay at failed banks. The two worked through the details through in-person conversations, weekend phone calls and late-night texts. Senator Marco Rubio of Florida has signed a public letter calling for the reinvigoration of collective bargaining and praising the German approach, in which labor unions play a larger role in the economy. Rubio this month published a book, “Decades of Decadence,” that criticizes the past 30 years of globalization. Senator Todd Young of Indiana has helped write a bipartisan bill to restrict noncompete agreements, which companies use to prevent their employees from leaving for jobs at a competitor. Senator Tom Cotton of Arkansas was among a bipartisan group of lawmakers who began pushing a few years ago for federal subsidies to expand domestic semiconductor manufacturing. President Biden signed a version of the policy last year. Tomorrow afternoon, these four Republican senators — Cotton, Rubio, Vance and Young — will speak at an event on Capitol Hill that’s meant to highlight the emergence of a populist conservative movement in economics. The event is organized around a policy manifesto, called “Rebuilding American Capitalism: A Handbook for Conservative Policymakers.” “We really like capitalism, but we recognize it’s not working right now,” said Oren Cass, a former aide to Mitt Romney and the executive director of American Compass, a think tank that published the manifesto. Cass is right about that: Income growth for most families has been sluggish for decades, trailing well behind economic growth. Life expectancy stagnated even before Covid. And polls show that Americans of all ideological stripes are frustrated with the country’s direction. “Capitalism is a complex system dependent on rules and institutions,” Cass told me. “And conservatism calls for building and maintaining institutions that work well.” A new capitalism I recognize that many liberals will be skeptical of the new breed of Republicans. For one thing, they really are conservative; they’re not disaffected right-wingers who have become moderates without admitting it. They support abortion restrictions and oppose gun laws. They make excuses for Donald Trump’s anti-democratic behavior or even spread his falsehoods. But the preference for a different kind of economic policy than one Republicans have long supported is nonetheless significant. It is a sign that the consensus in Washington is moving away from the neoliberal, laissez-faire approach that has dominated since the 1980s. These new conservatives are trying to separate themselves from anti-government Republicans like Paul Ryan — and, although they won’t say so, Ronald Reagan. One major reason is the class inversion of American politics. Most professionals now vote for Democrats, which is a stark change from past decades. Most working-class voters vote Republican, partly because they see Democrats as an elite party dominated by socially liberal and secular college graduates. Yet the Republican Party still has a major vulnerability with working-class voters. The party has long pushed the laissez-faire agenda that has hurt those voters, and polls show the country to be left of center on economic policy. Most Americans favor a higher minimum wage, higher taxes on the rich, expanded government health insurance and subsidies for well-paying jobs. When Democrats can flip the script on elitism and paint a Republican candidate as an out-of-touch protector of the rich, the Democratic candidate can often draw enough blue-collar support to win. John Fetterman used this approach to beat Mehmet Oz last year in Pennsylvania, the only state where a Senate seat switched parties. Politically, the new conservative populism is an effort to show that Republicans understand Americans’ struggles and want to help. Economically, the new approach offers a glimpse of a Republican Party that’s starting to grapple with the economy’s true challenges. The manifesto rejects the idea that free trade is inherently good and argues for policies to ensure the U.S. has a thriving, well-paying manufacturing sector that makes strategically important goods like semiconductors. “The idea that trade would lead to liberalization and a happy world was wildly wrong,” Cass said. The document also calls for: a guaranteed right for workers to organize and industrywide bargaining, which could increase the number of union contracts — and raise wages. a financial transaction tax, meant to reduce Wall Street trading that makes people rich without making the economy more productive. a monthly child benefit of around $300, as well as changes to Medicare and Social Security to recognize the work done by stay-at-home parents. an easing of government regulations, to encourage new construction. Progressives will raise principled objections to some ideas — such as a ban on unions’ campaign donations. And that’s how a democracy should function. The country’s two political parties are not on the verge of agreeing about most economic issues. But something is changing. More politicians are recognizing that the policies of the past several decades have failed to create a broadly prosperous economy. From that emerging consensus may eventually come a longer list of bipartisan legislation designed to lift living standards.

Emily, “Seriously, just tax the rich,” May 18, 2021 dmr

Lots of people right now say the economy seems unfair. It feels like the system is rigged in favor of the people who need help the least. And that makes many people lose faith in the economy — it’s easier to believe in America when you feel like America isn’t stacked for winners.

Maybe the austerity charade is over. Joe Biden didn’t give the normal hat tips to it on the campaign trail and has shown little restraint in spending since his inauguration. Spending popped up to $7.2 trillion and the debt increased to $30.2 trillion in his first year in the White House.

Here’s what people ought to take from the 21st century presidents’ failure to follow through on their debt and spending promises. Limiting spending and paying down debt is still a generally popular stance. People want their elected officials to act like adults and live within their means. Yet presidents disregard that expectation when faced with the crisis of the day, which encourages them to spend more and go further into debt. War, recession, pandemics, or even making good on a different campaign pledge is a higher priority than budget cuts and extra debt payments. As the spending and debt trends show, spending stays up even when the temporary reasons end.

You know the Trump era is over when Democrats and Republicans are yapping over issues like the federal debt and the annual deficit.

Welcome back! If Biden’s unofficial campaign slogan was Make Politics Boring Again, he was successful.

There is, so far at least, little fear that Democrats are spreading themselves too thin by eschewing the traditional practice of focusing on a handful of domestic policy issues in the first two years of an administration. “Political momentum and political capital is like a muscle. The more you exercise it, the more of it you have. It is not like a finite resource that you can run out of if you spend too much of it. What happens is that if we do a lot of positive things, then we’ve got more political clout to do even more positive things,” Sen. Brian Schatz (D-Hawaii) said. But there is an undercurrent of fear that Democrats lost focus on battling the pandemic and that those gains might be forgotten if current trend lines prompt new shutdowns. “We’ve done a good job over the last several months. But we’re going to have to continue to do it with aggressiveness and precision because the other side has no interest in governing and is going to spend all their time trying to mischaracterize public policy wins,” Rep. Hakeem Jeffries (D-N.Y.), who is in charge of messaging in Pelosi’s leadership team, said. Some worry that the Biden administration needs to stay focused on promoting the $1.9 trillion American Rescue Plan, fearful of mistakes similar to 12 years ago, when the Obama administration neglected to promote its roughly $800 billion economic recovery bill after it passed a month into office. “I don’t think they’ve gotten enough credit for the extraordinary logistical and managerial effort to manage the rollout of the vaccine. That was a big task. And I think it was managed effectively. And I think that’s maybe the most important thing and the least discussed,” Sen. Angus King (I-Maine) said. In late 2010, while he was still a college professor, King wrote an essay, “The Democrats Beat Themselves,” citing how poorly the Obama administration sold the economic recovery. “Basically, the President was subjected to a two-year, nonstop ‘Swift Boating’ and never really fought back,” King wrote after the 2010 political bloodbath for Democrats. So, yes, on Tuesday, federal health officials reported more than 62,000 new cases of the deadly virus as 314 Americans died of the virus. A day earlier, the stock market tumbled more than 700 points amid fears of the health crisis causing another economic shock. But exactly six months earlier — Jan. 20, the day Biden was sworn in under strict social distancing and masking guidelines outside the Capitol — there were more than 185,000 new virus cases and a rolling weekly average of almost 200,000, with 4,440 deaths caused by covid-19 that day. On Jan. 20, the Dow Jones industrial average stood at 31,188, far below the closing of 34,512 six months later. Labor Department reports this month showed strong wage growth amid steady job growth that suggests sometime next year, the economy will recover all the lost jobs from the pandemic. In June and most of July, Biden tried to move past the pandemic and focused his attention on the bipartisan infrastructure plan and the proposed $3.5 trillion budget plan that is favored by liberals. Those two packages are filled with campaign pledges to remake government support for the middle class, the most ambitious budgets since the Great Society proposals of the 1960s. Democrats will need to make Congress spend a lot more time in Washington if they want to get Biden’s agenda passed Democrats defend these proposals as worthy of the big moment the nation faces. “We are confronting a multitude of crises, including a once-in-a-century covid-19 pandemic, a democracy crisis, a racial justice crisis and a climate crisis all at the same time,” Jeffries said. Schatz views the old presidential model of focusing on a couple big things as outdated. “The model from the ’80s was if you do too many things, people are going to get freaked out. And I think the danger here is not doing enough rather than doing too much,” he said.

As always, simple theories with broad explanatory power generally catch on quickly in academia because they offer a catch-all mechanism through which to understand how certain phenomena work. However, political capital as a theory may be too simplistic, and virtually all empirical data disproves the idea that presidents have an invisible currency they can spend on influencing members of Congress to carry out their bidding. Presidents do have influence in legislation, but not to the extent that political capital theorists would have you believe. Other factors, such as ideology, party affiliation, constituents, and election cycles, more accurately explain legislative outcomes, but political capital conflates these with actual examples of presidential influence.

My research does not support Greenstein’s theory. Instead, my findings align more closely with those of George Edwards in At the Margins, where he argues that the “national preoccupation with the chief executive is misplaced,” and that presidential power is, in fact, limited in the Constitution’s “purposefully inefficient system in which the founding fathers’ handiwork in decentralizing power defeats even the most capable leaders.”50

Instead of focusing on legislative skills as a source of presidential influence, Edwards argues that party support and public support are more important. Legislative skills are only critical for “members of Congress who remain open to change after other influences have had their impact.”51 In a time as polarized as today, where very few members of Congress are “open to chang[ing]” their vote, these skills play a minor role in legislative negotiations. Similar assertions are made in another book by Edwards, Predicting the Presidency. He argues that exploiting existing opportunities (consolidating existing party and public support) is much more important for presidential success than creating opportunities (convincing legislators to change their vote vis a vis legislative skills).52

Slow-walking will absolutely be the Republican strategy, on both appointments and legislation. They won’t come out and say they’re going to stonewall every appointee and refuse to allow any legislation to pass; instead they’ll say that they just want to make sure Biden doesn’t stock his administration with radical leftists and propose far-out socialist laws. Send us the nominees and the bills, and we’ll consider them. It’ll just take some time. Weeks will then stretch into months, and the Biden agenda will languish. They’ve done it before — Obama himself describes how they endlessly dragged out negotiations on the Affordable Care Act by claiming they might support it — and they’ll do it again. That’s the Republican plan. The first step to getting around it is to understand that the public won’t blame gridlock on the ones who are causing it. They’ll just see a bunch of bickering in Washington with nothing getting done, and Biden will be the one who takes the blame. Once you realize that the public is neither aware of nor particularly concerned about process questions, you can stop worrying about whether Republicans will squawk at this appointment or that executive order — because they’ll squawk no matter what you do. If it’s a good idea and you think the results will be good, then just do it. As quickly and comprehensively as possible. As David Roberts of Vox observes: In 2009, Obama and his aides made the mistake of thinking that their major initiatives had to be rolled out one at a time in sequence, because he had a finite store of “political capital” that had to be spent carefully. But political capital is not something that exists apart from any particular issue; it isn’t a special sauce that has to be poured on a policy in order to make it palatable. And with the parties as polarized and unified as they are, political capital has become all but meaningless. There may have been a time when a popular president possessed so much capital that a senator from the opposition party would feel compelled to support him on part of that president’s agenda, but that time is long gone. There is no account Biden can draw on to turn Republican “no” votes into “yes.” So setting up a series of high-profile policy battles may be the opposite of what Biden should do. The unfortunate fact is that he may not have the opportunity to do much in the way of big legislation on health care or climate change or anything else, and if he has only executive power to work with, it makes it all the more urgent to move quickly. Which means getting staff in place immediately and then unleashing them. The Revolving Door Project argues that Biden should give as much authority as possible to the agencies to let them dismantle their particular corners of the Trump legacy on their own, because the task “simply will not happen if approached sequentially or micromanaged” by a White House staff with limited bandwidth. That means moving on every policy area all at once. There’s nothing to be gained by putting off any part of Biden’s agenda. Whatever he can do given the limits of his power, he should do as soon as possible, in a flood of policymaking. Even if Democrats win both Georgia races and control the Senate, Biden should acknowledge that he likely has two years until the 2022 midterm elections to pass whatever legislation he can. Not only will Democrats probably lose one or both houses in the inevitable backlash (as happens to most presidents in their first midterm), the only possible chance at forestalling that result is to get results, as many as possible, that he can show the voters. Republicans will complain that Biden is being partisan, uncompromising, taking a “my way or the highway” approach. It will be a strategy to convince everyone of the lie that Biden and Democrats might be able to find some way of winning them over, when in fact they’ll be implementing a strategy of total opposition. If Biden follows them on that fruitless quest, he’ll be running in circles while crucial time passes and nothing gets done. The only option for him is to decide not to care about Republican whining and do what he got elected to do with all haste. The alternative is failure.

Step back from the Kavanaugh cacophony. Examine what lawmakers from both parties in both chambers accomplished in September and early October, with virtually zero fanfare. Amid the turmoil, Congress approved the first revamp of national aviation policy in years. The Senate approved the final version of the legislation 93-6. This came after a staggering six extensions due to bickering and disagreement. Then, Congress approved a sweeping, bipartisan measure to combat opioid abuse. The House okayed the package 393-8. The Senate adopted the measure 98-1. And, there was no government shutdown. The House and Senate came to terms on two bipartisan bills which funded five of the 12 annual spending bills which operate the government. The sides agreed to latch an additional measure to one of the spending plans to fund the remaining seven areas of federal spending through December 7. President Trump briefly threatened to force a government shutdown if lawmakers didn’t include money for his border wall in the plan. But the President ultimately punted that battle until December. Democrats praised Republicans for keeping conservative “poison pill” riders out of the appropriations bills. That decision drew Democratic support for the measures. The Senate approved a bipartisan water and infrastructure package. McConnell hailed the bipartisanship which descended upon the Senate – even as the senators fought over Kavanaugh. Nearly in the same breath, McConnell derided boisterous, anti-Kavanaugh protesters outside the Capitol as a “mob.” McConnell insisted this week he needed the Senate to clear a slate of 15 conservative judges to lower courts before he could cut senators loose for the midterm elections. McConnell and Schumer appeared at loggerheads. McConnell’s goal was clear: extract the confirmation of these nominees – or tether to Washington vulnerable Democratic senators from battleground states to keep them off the campaign trail. Schumer knew McConnell would ultimately prevail on the nominees after the midterms. So the New York Democrat accepted McConnell’s ransom, permitting the Senate vote on a slate of nominees on Thursday night. Schumer also extracted a concession from McConnell: send senators home until November 13th. One may wonder how lawmakers can find themselves in an imbroglio over a major issue like Kavanaugh – yet forge major bipartisan accords on other. Frankly, that’s just politics. Politics always elicits strange bedfellows. Successful lawmakers know they should compartmentalize their disputes. The enemy today may be your best ally tomorrow.