Steve Forbes, editor-in-chief of Forbes Media, isn't too impressed with proposals in Congress to finance transportation spending with tax hikes.
"Uh-oh! Washington is coming down with another tax-and-spend fever," he writes in Forbes magazine
. "The cause this time is an old-timer: highway spending. The prospect of ladling out more money for roads even has many Republicans acting like dogs in heat."
The Highway Trust Fund, which finances most transportation programs, is broke, Forbes explains. About 90 percent of the fund's money comes from federal gasoline and diesel taxes. And that's not sufficient now to pay for existing projects.
"What to do? In Washington the answer is almost always more taxes," Forbes says. To finance the fund, politicians want to boost gasoline taxes and levy a tax on companies' foreign earnings.
So what should be done for the highway fund? "Just pump in general appropriations," Forbes recommends. "Then return the fund to its original 1950s purpose: to build and maintain the federal Interstate Highway System, period."
Elsewhere on the economic policy front, Connie Razza, director of strategic research at the Center for Popular Democracy, says that while the Great Recession officially lasted from December 2007 until June 2009, for many Americans, it's still not over.
And that's a good reason for the Federal Reserve to refrain from raising interest rates soon, she writes in The Nation
Most economists expect the Fed to lift short-term rates off their record low in either September or December. "A Fed decision to raise rates amounts to a vote of confidence in the economy—a declaration that we have achieved the robust recovery we need," Razza says.
"But for many millions of Americans, the recovery has yet to arrive, and for them, a rate hike will be disastrous. It will put the brakes on an economy still trudging toward stability, stall progress on unemployment and slow wage growth even more."
The unemployment rate fell to a seven-year low of 5.3 percent in June, but wages have averaged an annual increase of just 2 percent since the Great Recession ended.
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