Council of economic advisors obama. Resident its an hour. [captions Copyright National cable Satellite Corp 2020] [captioning performed by did national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] [captions Copyright National cable Satellite Corp 2020] here today as as part rebuilding the Global Economy project. A major initiative, not just in time for a u. S. Administration or a new term of an old depending on what happens, but in time for the stock taking going on and the on how to open the World Economy when the u. S. Has ehaved as it has for the last four years but also, equally importantly, if not more so, hen were all facing the vulnerabilities that came out of the pandemic. Before introducing my colleagues who will be speaking today about memo to the white house, economic council, the c. C. E. A. , and the u. S. China trategic dialogue let me say a couple of words about the rebuilding project. Were very excited about this and its open to everyone in the engage. Hat we wish to the world has been moving 2008. Ards since roughly both in terms of economic outcomes and international integration. They come from different causes degree but they reinforce each other. Whicht through decades in they went understand hand. Greater peace and prosperity for of the worlds population. Since the gone well Global Financial crisis and the pandemic has intensified those risk that wee real face, digital disinformation and the loss of privacy and the pandemics, are all rising in a world in which these are global threats. They are economic threats because our Economic Policy our economic incentives and activities affect we badly they hit us, and so need a global approach to get a world get back to where we can confront these pandemics and that does not mean globalization he fantasies of the late 1990s. Chosen the world, were rebuilding is the apt verb. E need to assess whats going on in the World Economy. What parts of it are salvageable. What parts of it are essential, of it can be restored. A practical to be exercise so my colleagues and i, fellows in thehe institute, are writing memos to key policy decision akers, what they should be doing firstoff. Thats what well hear about they should stop doing immediately which is what well also here today. Through coming months the end of the year well be rolling these out. Ast week we rolled out the memos to the secretary of commerce in the u. S. And to the u. S. Trade representative as associated senior officials featuring evan leading business person and a jones senior fellow. Well be having arry summers and pete blair henry speak about what the u. S. Treasury should do. Nd hear from International Organizations, foreign governments, particularly european organizations, and what rebuild ld be doing to the Global Economy. Starting in january well put a comprehensive plan developing some of the proposals fellows from our priorities and seeing how they fit together and well continue he track of how the Global Economy is coming bag together. Again im very grateful to all y colleagues at the Peterson Institute. Our onBoard Members, who are participating, our Board Members support us and to our stakeholders who want us to come up with practical ideas. Peterson t the institute is to push out the envelope. Be within the tent in the sense realistic and were talking to whoever is an office about what you can do better, but to be ambitious, not o be constrained by short term politics to actually push for what can be done realistically not is better and were wedded to the old ways. An e simply wedded to empirical reality. On the u. S. Administration and europe and International Organizations is ot to say that people of other continents, of africa, of latin of ica, of asia, are not, eastern europe, are not stakeholders at the table. Quite the opposite. Feel we we do not should be presuming to speak for hem as a bunch of people who were brought up in america and europe and served in american and european governments and so rnational organizations we hope to engage through the First Quarter of 2021, with representatives, fellow scholars, fellow former officials, around the world, to nonamerican, noneuropean perspectives and how we might Work Together and we to that engagement. And foremost the u. S. Has to get its house in order to economy. He global onstructstive Economic Solutions do exist to the international existential threats we face but they must be targeted and they must be based rebuilding. They must be global. So please join us in this effort. To my let me turn colleague, professor fellow. Ent senior jason has been one of the extraordinary Economic Policymakers of the last 20 serving in a variety of senior roles in both the clinton and obama administrations, and particular as chairman of the council of economic advisors in obamas second term. Jason, weve asked you to address what the criminal should do uncil articularly in the area of interNational Economics. Thank you so much, adam, for organizing this excellent series, and including me. I served as Deputy Director of National Economic council during the last financial crisis. I walked in the door of the 21, 2009,se on january second floor of the west wing where the leadership of the National Economic council is housed. Time, the unemployment 7. 8 . Was the Financial System was in crisis. And we were terrified about the future of the u. S. Economy. Walks into that office in january of 2021 will actually a very similar Unemployment Rate. Sevens. Will face an economy with over 10 million mean out of work. Illions of businesses having failed or facing enormous train, and problems in the Financial System as well. Respects,ee important the National EconomicCouncil Director will be in a different we were in, in january 2009. The first respect is that in 2009, our worst days were ahead of us. The stock market was still falling. Unemployment rate was still rising, there was a daytoday to whether some of our largest Financial Institutions would even survive and if they collateral at other damage they would have for workers and the Global Economy. Now the unemployment at least to date has been falling. It may have a bump up with the vaccine ve, but as the gets rolled out next year very likely that Unemployment Rate continue to fall. The stock market and financial stable. Are much more its an enormous amount of suffering in the economy and an to beus amount that needs done but the ratio of the house put the flames out, to there is a longer term a bit ral problem is different than it was in 2009 more room to focus on the long term structural problems and also more need. The second difference is that the United States has more in 2021 than it had in 2009. That may seem paradoxical. Much all, the debt is larger as a share of the economy 2009. Han it was in that interest is, rates are much lower than they were in 2009. Interest on the debt is lower today than its much of u. S. History. Post war u. S. History and the eal inflation rate is actually negative. That means the United States can borrow money and repay it with valuable s even less in the future. Some of that is a byproduct of but much of self, that was true even before the crisis. January and february of this year. That gives effectively an unlimited amount of room to respond to the short term problems with fiscal measures, as is needed, and it doesnt give unlimited license policies. R term i still think they should be paid for so that the debt isnt and beyond what would happen in the baseline. Any pressure off considerations about active deficit reduction. He third important difference from 2009 is in 2009, the united unleashed the crisis on the world. We had caused it. It around the world, and at least for the first year or two, the united was the most severely impacted in the world. The u. S. Economy was reeling. This time around, the united not cause the immediate crisis. Moreover, in part because of the large initial fiscal response, one that tragically has not been followed through on to lapse, but d the initial was so large, the quick, y response was so effective and decisive, that the economy has actually many other s than economies around the world especially in europe. The United States in a better position to help lead a rebuilding of the Global Economy hat rebuilding of the Global Economy is absolutely necessary, immune to the re virus that causes covid19, but ravaged the rest of the world the way that it has had all would have likely recession in the United States, shock that e global is causing. It was terrifying that we might have a way of emerging debt crises. Oday that looks a little bit less likely, but i dont think were out of the woods on it, will be inted states a better position economically to show leadership. A side note chinas economy even better than the United States because its done better job of getting its virus under control but you taking steps,hina like bilateral debt forgiveness, g20 and the like. Really the United States is the only country that can do that. It hasnt done it to date. Immediate priority for the National Economic council for house, for the entire the nment, is going to be economic recovery. Karen will be talking about that any wont talk about it in detail except to say a very that whatever is done should not just last for one year. Its uld last as long as needed. One of the lessons i take from the financial crisis was its need your at you response to be large. You need a response to be long. Cares act, for example, was very large but it only lasted about four months. Need to make sure the next approach lasts as long as needed that linkthe triggers it to the Unemployment Rate, as ong as its elevated, assistance, would be delivered. Structural parts of the rebuilding will include elements, all of which have an Important International as well. The first that i highlight is investment in children. Really important in its own right bit also is absolutely the sary to give america security and confidence to global ate in greater integration and a greater u. S. World. The this is obviously almost entirely a domestic agenda but 2014, the g20 put on the agenda the issue of womens participation in the work force got all the g20 countries in that goal to improve dimension the g20 could similarly help the United States lock in its progress in this area. Reforming the tax code is going to be essential and one of the most broken parts of it is that tax code was essentially designed globally to avoid taxed. Es being double paying tax on the same income in two jurisdictions. To do this. Esigned as a result, in many cases companies are paying no taxes in any jurisdiction. Youve seen a set of ad hoc responses in a number of taxes es, digital discussed in europe. The guilty provision in the states. He oecd is the clear venue for accelerating cooperation on the profit shifting. Coming to the table by saying we did some International Reforms in 2017. Want to improve on them and work to make it more of a global concept, would put us in a very good position. Limate change, we all know, is an international issue. Its also a critical economic issue. Goal there is to take steps ike border adjustment and the like, that could protect economy that is choose to deal more with incentives ge, give to economy that dont do as much and to imate change, make sure thats done in a so ally agreed upon manner, it doesnt lead to unraveling of rules. Bal trade ill just list one more policy a very hink has Important International dimension, and that ive worked and a lot on personally thats competition policy and digital competition. United states has the right central goal for competition policy, which is a welfare. Consumer the problem is the United States hasnt lived up to that goal. Efforts around the world to redefine how to do competition, to include a regulatory on approach with leadership from united her places the kingdom, australia, germany, and france. The United States very much to catch up with all of them. Globally ave a negotiated way to do competition policy. Weve never had that but we can have a globally convergent way to o competition policy and have that happen. It cant just be left to the competition authorities. That the finance ministers and economic leaders and the National Economic involved in to be negotiating. Ill conclude, i think you have enormous opportunity. There is a sense of crisis that to be ng really needs done, but there is enough time and space to do something not run but about rt our bigger structural problems. United d needs the states. The United States cant succeed without the world, and these are tangible steps that can be taken in that rebuilding process. So much, jason, for someone like you, to so a case tely put forward for constructive optimism and series of purposes, great inspiration. Please allow me to turn to karen, who is writing an chair of the council of economic advisors. Karen is also a professor of the practice of economics at harvard university. Nonresident senior fellow at the Peterson Institute. She served as the assistant of the treasury for economics, basically the chief economy it and forecaster of the treasury in the second term of the obama administration. Prior to that she was vice economic studies at brookings and had a long distinguished career at the reserve as one of the leading researchers on savings and fiscalr behavior issues. Karen, overview, please. Thanks, adam. Be a , am delighted to part of this. Important. S policy priorities for the president s council of economic strengthen t would the u. S. Economy as part of ostering rebuilding and recovery, so in my remarks today want to emphasize three points. The First Priority is that we need to deploy additional fiscal stimulus to support the u. S. Recovery from the pandemic over the longer un strengthen automatic fiscal stabilizers. So, by way of background, the early phases of the u. S. Sharp rebound a in aggregate demand. So we saw that in employment, in consumer spending. In business investment. Other indicators. But, that was the good news. The bad news is that the partial has been only to date. Or example, non payrolls in september were 11 million above their april trough, which is respects, but me nonetheless were only halfway back. Create or ed to recreate 11 million more jobs where we were in february. And the pace of recovery has so the september change in nonfarm payrolls was 600,000. As you can probably calculate in at that rate of increase it will take a very long time to create the millions nd millions of jobs we need to get back to full employment. That we can even count on this slower pace of improvement continuing. Aggressive countercycle fiscal policy supported the early recovery, and as we know, most of those measures off or they have expired. So at a minimum, to avoid the stalling, i recommend that we pass more funding for states, additional aid for small businesses, we also need to reinstate some supplement to nemployment benefits, and extend the period of expanded eligibility. Thats short term fiscal policy, looking at what needs to be done longer run, we should recognize that fiscal stimulus uring periods of economic weakness, not just this downturn downturns in st this country and other countries, has been too small, and too lived, susceptible to short term political wrangling. Failure to pass more stimulus in the last three onths demonstrates this point miserably. And the fact that Monetary Policy is likely to be by zero lower bound issues for the foreseeable future means that countercyclical fiscal policy is going to have to play a much recessions fighting going forward. The point being, that we need to automatic stabilizers so that countercyclical fiscal reliant on t so discretionary fiscal policy changes. There are a number of good there for doing so, and this is building off of what jason said. It involves brigadier being more generous. For instance, you could have supplemental food stamps. Unemployment insurance. Higher federal medicaid spending and lower payroll tax rates, all turned on when the unemployment and is a certain threshold then turn off again when it comes back down. O thats the First Priority i have for you. A second and related priority is u. S. Social programs. The consequences of the pandemic income, and the wellbeing of American Family preexisting ed weaknesses in u. S. Economic and social systems. Vinolas cases, job losses, and usiness failures have all occurred disproportionately among people with less income among members and of disadvantaged racial minority groups. Pandemic has rds, really underscored the need to strengthen the safety net in mi