"This is an economic revolutionary moment," said Andrew Stern, the Ronald O. Perelman Senior Fellow at the Richard Paul Richman Center for Business, Law, and Public Policy, on Thursday. Stern predicted that the US economy will transform dramatically over the next 30 years. "We’ve never seen so much change so quickly."
Stern was part of two events held by the Richman Center last week that focused on topics at the top of voters’ minds this fall: US tax policy and the future of the middle class. On Thursday, September 20, Stern joined Chris Mayer, the Paul Milstein Professor of Real Estate and co-director of the Richman Center, to discuss the prospects for the nation’s middle class.
Historically, Stern noted, without the social safety nets of many European countries, the United States redistributed wealth in three ways: through the market, the government, and trade unions. "Today we do not have a plan for the middle class," Stern said. "If we do nothing, the middle class will continue to erode."
Mayer touched on the topic of home ownership as a stabilizing force for the middle class. "Housing has always been a way that most Americans could hope to build assets," Mayer said. "Owning a home was always viewed as upward mobility." He says that programs that link savings to home ownership could help more people become homeowners, even in the current difficult lending climate.
The speakers also discussed education’s role in supporting a middle class. While Mayer admits that thinking about education differently is crucial — a typical four-year college degree might not be the most beneficial investment for all people — its importance should not be downplayed, even as the debate over high student-loan debt continues. "There have to be opportunities for everyone to pull themselves up," Mayer said.
On Wednesday, September 19, Professor Mihir Desai of Harvard Business School and Professor Michael Graetz of Columbia Law School joined Stern to discuss new tax policies with moderator Jesse Greene, executive in residence and senior fellow at the Richman Center. Graetz explained his alternative tax policy plan, which overhauls the current system to combine a value-added tax — a consumption tax on goods and services, common in European countries — and a small tax on high-income earners."Today’s tax reform problem is daunting," Graetz said. "We can no longer depend on income taxes to fund government expenditures in the current global economy."