DealBook: Watching for Christine Lagarde’s Stance as Head of E.C.B.

More: The Fed wants to avoid the prospect of the U.S. entering a low-rate, low-inflation, low-growth trap.

How to make capitalism work again

American capitalism is at an inflection point, with enormous levels of inequality, declining economic mobility, less-competitive markets and an unsustainable fiscal trajectory, Henry Paulson and Erskine Bowles write in a NYT Opinion article.

But they say the solution is not to blow up the system or to maintain the status quo.

Proposals addressing universal basic income, “Medicare for all” and direct taxes on wealth “are fundamentally misguided and would result in economically harmful outcomes that could put our economy on an unstable and precarious path,” they write.

Other policy solutions could allow more people to share in America’s success, they say. The writers’ proposals:

• Investing in human capital, including education and productivity.

• Looking at more efficient ways to encourage work by supplementing wages.

• Correcting the country’s fiscal trajectory by raising more revenue, slowing the growth rate of health care spending and making Social Security sustainable.

• Overhauling the tax code to make it more progressive and take in more revenue.

Related: New York, London and Hong Kong are international financial centers, but they matter less in a world that is deglobalizing, Greg Ip of the WSJ writes.

Article source: https://www.nytimes.com/2019/12/12/business/dealbook/christine-lagarde-ecb.html?emc=rss&partner=rss