Boosting the middle class currently occupies much of the attention of U.S. politicians and economic policymakers. But some of that focus is misplaced, says Harvard economist Martin Feldstein.
"The middle class has been doing much better than the statistical pessimists assert," he writes on Project Syndicate
. "And with better policies, these households can do even better in the future."
Take average household income figures. Some Census Department data back up the idea that income has barely risen, if at all, in recent decades, says Feldstein, who chaired the Council of Economic Advisers under President Reagan.
"But more accurate government statistics imply that the real incomes of those at the middle of the income distribution have increased about 50 percent since 1980," he says. "And a more appropriate adjustment for changes in the cost of living implies a substantially greater gain."
That would put the increase of household income at almost 2.5 percent annually over the last 30 years.
Improving existing government programs can lead to even more progress for the middle class, Feldstein says. That includes expanding market-relevant training and tax reform to boost productivity and wages.
John Tamny, political economy editor at Forbes, also thinks the emphasis on the middle class is overdone. Writing on Forbes.com
, he takes presidential candidates Jeb Bush and Hillary Clinton to task for trying to build their campaigns on boosting that hallowed demographic.
"While they’re not terribly similar in terms of policies, each has chosen to pander to an apparently easy to gull middle class," Tamny states
So what should the two candidates do?
"Were both Clinton and Bush more economically attuned, and perhaps a bit more honest, they would correctly say that the best and only way to achieve their goals would be to substantially reduce the tax burden foisted on the rich and big corporations alike," Tamny maintains.
"Nothing could be simpler, yet each candidate seems rather eager to not be seen as too cozy with the successful. That’s odd, and not just when we consider the net worth of Clinton and Bush, along with those donating to Clinton and Bush."
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