Over the past 40 years, America’s approach to economics has changed little. On both sides of the political aisle, neoliberalism has increasingly become the dominant economic framework shaping public policy. However, this ideological model has drawn sharp criticism over its effectiveness in providing economic stability and its role in increasing inequality. This debate has led many to rethink the American economy and offer a different blueprint for the future.
Consider the concept known as the “Overton Window”: the range of policies that the public is willing to consider and accept. It explains how the once-dismissed “pie in the sky” idea became mainstream. Overton’s window widened even further after the 2008 financial collapse, when many people questioned and challenged the status quo. During the COVID-19 public health crisis, the paradigm shifted again, as politicians scrambled to develop measures to provide people with the help they needed.
As the country slowly returns to normal life after the peak of the pandemic, questions remain about whether new changes will be coming to Overton’s window. Natalie Foster, director of the Economic Security Project, is one of the key architects behind the new economic policy that believes so. She is the author of the recently published book, The Warranty: Inside the Fight for America’s Next Economy.
Marketplace Morning Report host David Brancaccio spoke with Foster about the feasibility of the economic framework and how close it is to reality. Below is an edited version of their conversation.
David Brancaccio: So, isn’t it time to think about it little by little?
Natalie Foster: surely. This is not the time to think incrementally. We live in a time when 4 out of 10 Americans are unable to raise their $400 in an emergency. People are feeling stressed. they are overworked. The economy is not working for many people. It’s time to rethink what the economy can do.
Brancaccio: Considering the debt this government has taken out recently, are we still thinking that bold? So much debt and a Congress that can barely agree on anything?
Foster: These ideas are no longer just a pipe dream. For example, we’ve seen the government mobilize the National Guard to get free vaccines into people’s hands. That is medical insurance. Billions of dollars in student loans have been canceled by the government, leading to a move towards higher education and college guarantees.
Brancaccio: But guarantee, that’s a dramatic word. Sounds radical.
Foster: But guarantees are the basis of capitalism. This country provides guarantees such as patent rights and a currency system to ensure that businesses and America function. So I’m arguing that we should extend those guarantees to ordinary Americans who are building our economy from the ground up.
Brancaccio: Another idea that you talk about in the book, and it’s not your idea, is something called a “baby bond.” What is this? Do you want to make sure that the allotment someone was given at birth is available to them when they are older?
Foster: Baby bonds are a surefire inheritance. This is a trust fund established at birth for every child in this country, regardless of race, religion, or zip code. This allows your child to pursue an education, start a business, or even buy a home when they turn 18. It really gives kids choices. It’s like seed capital for the future, preparing all children to grow into adults while also beginning to close the racial wealth gap.
The interesting thing about baby bonding is that it is being tested and tested right now. Connecticut has surpassed that. Washington DC [and] California. This idea moved from the White Paper to practical examples in democratic laboratories across the country.
Brancaccio: By strengthening these programs, there is no need to worry that this floor will encourage the inertia of being deprived of ambition.
Foster: I think it’s quite the opposite. What robs us of ambition is working three jobs to put food on the table and pay the rent. During the pandemic, when we invested in families, sent stimulus checks, and expanded the child tax credit, people had more money in their pockets. It was the first time in recent decades that the creation of small and medium-sized enterprises in this country increased by his 24%. When people have financial security, they are able to work harder, take risks, and develop their ingenuity. We know this exists across America, but the opportunities are much more uneven.
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