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Time of India
27-05-2025
- Business
- Time of India
In 'big, beautiful bill ', Trump accounts just a political stunt to boost baby boom?
The Republican tax bill contains flashy goodies for families with kids. The flashiest: savings accounts for children — branded Trump Accounts — created and initially funded by the Treasury Department. These will consist of $1,000 in invested assets for each American citizen born through 2028, plus whatever funds parents later add. So if you want to have a baby, hurry up! The seeding of the accounts (previously called MAGA Accounts) expires at the end of President Donald Trump's term. The president has made his goal clear: 'I want a baby boom.' House Republicans also proposed expanding the Child Tax Credit from $2,000 to $2,500; that would also expire in four years. But if more babies are the goal, these cash carrots are the wrong incentive. Claudia Goldin said it best in her recent paper, 'Babies and the Macroeconomy': 'The birth rate is … clearly determined by forces that are independent of the whims of governments.' In a 2021 review of the literature of thirty-five studies across Europe and North America, 'Can Policies Stall the Fertility Fall?,' the three authors — a statistician, a sociologist and a public health expert, all in Norway — concluded that even sizable cash benefits have a modest impact on fertility. ALSO READ: Is Trump targeting Harvard because the elite university rejected his youngest son Barron? What you need to know Live Events Instead, the authors found child care and paid leave to be more promising levers. Access to child care slightly increased both the number of children families have and the number of first-time births — especially among low- to middle-class families. Child care support may increase the fertility of stay-at-home mothers by giving their older toddlers access to care. Paid parental leave was also found to have small, but positive, effects on fertility, in particular for higher-earning parents. Unfortunately, paid leave for parents and child-care support are largely missing from the reconciliation bill, though there are a handful of renewed and expanded tax credits for businesses that provide these things. The GAO reports that these have historically been underutilized. Perhaps baby-making isn't the goal anymore. After all, Trump Accounts cannot be accessed until the kids turn 18 and are explicitly for the kids, not the parents making the babies. Perhaps a better way to view Trump Accounts is not as encouraging a baby boom, but as a broader investment in family economic well-being. ALSO READ: Did Harvard reject Barron Trump? Truth behind his college choice has sparks buzz online That would be good news. As a country, we chronically underinvest in the young in favor of the old. Parents are more pessimistic about their kids' future, according to Wall Street Journal polling, than any time in recent memory. The US is an international outlier with its high share of single parents. Labor policy still doesn't reflect the reality that in most households, all parents are working. But there are better ways to promote familial financial well-being than Trump Accounts. The same criticisms apply as when Democratic Senator Cory Booker ran for president on a platform of baby bonds: First, families need support today, not locked up funds to be used two decades from now. This is particularly true for the bottom half of the income distribution. Second, none of these savings accounts speak to each other — 529, 401k, IRA, FSA or HSA, now Trump Accounts. It can be hard to predict where you'll need the savings, and savers are penalized for withdrawing for other uses. Hence the long-time conservative push for universal savings accounts. ALSO READ: Trump's promise to make US world's 'crypto capital' to be a reality soon? Check details Third, there is still a taxpayer cost attached: a nearly $20 billion price tag when combining the costs of seeding the accounts and tax-free contributions, according to the Joint Committee on Taxation. If the contribution program doesn't expire after 3.5 years, the price tag will rise by another $15 billion over the next 10 years, based on their average expected annual expenditures for 2027 and 2028. I believe we need more public investment in children, but the question remains: Who is paying for that? And fourth, two-thirds of American kids cannot read or do math at grade-level by fourth grade. This suggests that instead of an investment whose biggest expected use is higher education, children need earlier investments in high-quality tutoring to stay on track. Before sharing in the noble goal of stock ownership, let's get reading and math right. ALSO READ: This US state poised to enforce age verification on Apple, Google app stores for users under 18 To which I'd add a fifth: a four-year expiration date suggests a short-term political mindset and budget trickery much more than seeding the ground for long-run family flourishing. When it comes to supporting families, President Trump would do best to return to his roots. In his first term, he doubled the Child Tax Credit; boosted funding for the Child Care and Development Block Grant, the country's primary way of delivering child-care support to low-income families; passed 12 weeks of paid parental leave for all federal workers; and proposed a universal 6-week paid leave program for all American moms. On top of this, he oversaw a time of exceptional economic growth. This go-around he seems determined to inflict tariff pain and higher costs on American families. An extra $500 in child tax credit payments per family for a few years sounds nice, until you realize that the costs of tariffs per family are currently estimated to be nearly $3,000, per the Yale Budget Lab. Moreover, the bill as drafted puts us somewhere between $3 and $4 trillion more into debt; guess who inherits that. It might not have had the snazzy Trump Account branding, but Trump's first term arguably was a much better deal for babies.
Mint
27-05-2025
- Business
- Mint
Trump Accounts? Republicans Have Had Better Ideas
The Republican tax bill contains flashy goodies for families with kids. The flashiest: savings accounts for children — branded Trump Accounts — created and initially funded by the Treasury Department. These will consist of $1,000 in invested assets for each American citizen born through 2028, plus whatever funds parents later add. So if you want to have a baby, hurry up! The seeding of the accounts expires at the end of President Donald Trump's term. The president has made his goal clear: 'I want a baby boom.' House Republicans also proposed expanding the Child Tax Credit from $2,000 to $2,500; that would also expire in four years. But if more babies are the goal, these cash carrots are the wrong incentive. Claudia Goldin said it best in her recent paper, 'Babies and the Macroeconomy': 'The birth rate is … clearly determined by forces that are independent of the whims of governments.' In a 2021 review of the literature of thirty-five studies across Europe and North America, 'Can Policies Stall the Fertility Fall?,' the three authors — a statistician, a sociologist and a public health expert, all in Norway — concluded that even sizable cash benefits have a modest impact on fertility. Instead, the authors found child care and paid leave to be more promising levers. Access to child care slightly increased both the number of children families have and the number of first-time births — especially among low- to middle-class families. Child care support may increase the fertility of stay-at-home mothers by giving their older toddlers access to care. Paid parental leave was also found to have small, but positive, effects on fertility, in particular for higher-earning parents. Unfortunately, paid leave for parents and child-care support are largely missing from the reconciliation bill, though there are a handful of renewed and expanded tax credits for businesses that provide these things. The GAO reports that these have historically been underutilized. Perhaps baby-making isn't the goal anymore. After all, Trump Accounts cannot be accessed until the kids turn 18 and are explicitly for the kids, not the parents making the babies. Perhaps a better way to view Trump Accounts is not as encouraging a baby boom, but as a broader investment in family economic well-being. That would be good news. As a country, we chronically underinvest in the young in favor of the old. Parents are more pessimistic about their kids' future, according to Wall Street Journal polling, than any time in recent memory. The US is an international outlier with its high share of single parents. Labor policy still doesn't reflect the reality that in most households, all parents are working. But there are better ways to promote familial financial well-being than Trump Accounts. The same criticisms apply as when Democratic Senator Cory Booker ran for president on a platform of baby bonds: First, families need support today, not locked up funds to be used two decades from now. This is particularly true for the bottom half of the income distribution. Second, none of these savings accounts speak to each other — 529, 401k, IRA, FSA or HSA, now Trump Accounts. It can be hard to predict where you'll need the savings, and savers are penalized for withdrawing for other uses. Hence the long-time conservative push for universal savings accounts. Third, there is still a taxpayer cost attached: a nearly $20 billion price tag when combining the costs of seeding the accounts and tax-free contributions, according to the Joint Committee on Taxation. If the contribution program doesn't expire after 3.5 years, the price tag will rise by another $15 billion over the next 10 years, based on their average expected annual expenditures for 2027 and 2028. I believe we need more public investment in children, but the question remains: Who is paying for that? And fourth, two-thirds of American kids cannot read or do math at grade-level by fourth grade. This suggests that instead of an investment whose biggest expected use is higher education, children need earlier investments in high-quality tutoring to stay on track. Before sharing in the noble goal of stock ownership, let's get reading and math right. To which I'd add a fifth: a four-year expiration date suggests a short-term political mindset and budget trickery much more than seeding the ground for long-run family flourishing. When it comes to supporting families, President Trump would do best to return to his roots. In his first term, he doubled the Child Tax Credit; boosted funding for the Child Care and Development Block Grant, the country's primary way of delivering child-care support to low-income families; passed 12 weeks of paid parental leave for all federal workers; and proposed a universal 6-week paid leave program for all American moms. On top of this, he oversaw a time of exceptional economic growth. This go-around he seems determined to inflict tariff pain and higher costs on American families. An extra $500 in child tax credit payments per family for a few years sounds nice, until you realize that the costs of tariffs per family are currently estimated to be nearly $3,000, per the Yale Budget Lab. Moreover, the bill as drafted puts us somewhere between $3 and $4 trillion more into debt; guess who inherits that. It might not have had the snazzy Trump Account branding, but Trump's first term arguably was a much better deal for babies. More From Bloomberg Opinion: This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Abby McCloskey is a columnist, podcast host, and consultant. She directed domestic policy on two presidential campaigns and was director of economic policy at the American Enterprise Institute. This article was generated from an automated news agency feed without modifications to text.
Mint
12-05-2025
- Business
- Mint
How a manufacturing boom could help India close the gender gap
The Donald Trump administration's announcement of reciprocal tariffs on several American trading partners is causing a strategic shift in trade globally. As India gears up to take advantage of this by ramping up manufacturing, there lurks another opportunity. Many of the manufacturing sectors in focus, such as apparel, textiles, footwear, food products and electronics, have a higher than average representation of women in their workforce. In fact, an estimated 60% of the women employed in (both formal and informal) manufacturing are in these sectors. This could be a critical moment for women's workforce participation and their economic empowerment in India, and presents an opportunity too precious to be lost. As things stand, Periodic Labour Force Survey data shows that India is at the cusp of the U-shaped curve for female employment popularized by Economics Nobel prize winner Claudia Goldin. Simply put, as India's income grows, more women should be entering the workforce, triggering a virtuous cycle of development. A gendered approach to manufacturing could provide the tipping point. Also Read: Abandon prejudices for women's participation in workforce to rise A brief look at the sectors first. The Indian textiles and apparel industry is projected to grow at a compounded 10% a year to reach $350 billion by 2030 even without the fillip that an export boost may bring. About half the women in formal manufacturing work in the textiles and apparel sector. This is an industry with a history of employing women and a demonstrated comfort with integrating them into the workforce, making it a natural focus area for scaling up female labour-intensive production. Electronics is another major sector set to expand rapidly, as Indian exports of smartphones, laptops and other items look up, thanks partly to new advantages. The electronics sector contributes about 3.4% of India's GDP. According to the ministry of electronics and information technology, the exports of India's electronics industry are expected to increase to $120 billion by 2026. Gender-representation data of the largest companies in India shows that the consumer durables sector (in which electronics falls) has 14% women, up from only 9% in 2021, driven by players such as Foxconn in Tamil Nadu's electronics hub. This is an appropriate moment to hardwire gender inclusion into India's global electronics trade strategy. Also Read: Women-centric policies need to deliver progress that's tangible and enduring Footwear is yet another area of potential growth. The industry is poised for compounded expansion of about 13% annually. Footwear manufacturing is labour-intensive and traditionally employs a high share of women. Targeted support to expand production could boost exports and create thousands of jobs for women. The potential for growth in women's employment is clearly demonstrated by our regional neighbours. Women make up 80% of the workforce in Vietnam's footwear industry, 65% in Bangladesh's garments industry and 60-65% in Malaysia's electronics industry, all of which are job- and money-spinners for their respective export sectors. Employment-linked incentive (ELI) schemes, which states commonly roll out to encourage businesses to create local jobs, can be modified to include an additional benefit linked to women's representation. These incentives can be offered in a way that blends well with existing schemes in those sectors, so that they do not require much additional budgetary support. Also Read: Rahul Jacob: Working for women bosses is a privilege one must treasure Payroll subsidies: Providing a greater subsidy for the employment of women or extending the duration for which a subsidy is paid out in the case of jobs given to women can also help. The subsidy can be set in tiers—progressive benefits with greater women's representation—to ensure a practical and sustained programme. Employees Provident Fund Organisation (EPFO) reimbursement subsidy: An easy way to roll out a payroll subsidy is to link it to the employer's EPFO contribution for women employees. This has the dual benefit of easier authentication and lower need for payroll processing resources. Capital investment support: Capital expenditure subsidies, including tax benefits and preferential financing for infrastructure investments, can have specified gender diversity targets. One-time hiring support: Since there may initially be higher costs of hiring associated with employing women, a one-time subsidy could be given to compensate for that and prevent women from being penalized for this job-opportunity-reducing cost gap. Such support should cover jobs across the skill spectrum from blue-collar to white. Also Read: Why business schools hold the key to bridging the gender gap Employment through skilling programmes: Many women gain skills under schemes like the Pradhan Mantri Kaushal Vikas Yojana or train at industrial training institutes, but are unable to participate in the job market for a variety of reasons. While this needs to be addressed, industrial employers should be incentivized to go the extra mile in hiring women with such qualifications. One-time hiring support for senior roles: An incentive for hiring women in high-level or high-skill demanding roles could help. For example, in Tamil Nadu, there is a three-year subsidy for jobs paying over ₹1 lakh per month, with an additional amount if the employee is a woman. Given our commitment to Viksit Bharat and Nari Shakti, this is the right time to harness the power of women for national development. This is a historic knock of an opportunity, one we must not miss. A manufacturing boom could help the country close the gender gap. The authors are, respectively, former secretary, ministry of labour and employment, Government of India; and founding CEO, the Udaiti Foundation.
Forbes
27-04-2025
- Business
- Forbes
Closed-Loop Demand For Government Bonds
With the whipsawing in the markets over the last month, a concern du jour has arisen. What if the United States cannot sell its bonds to the old reliable ready purchasers, to the same always game counterparties? The Chinese appear to be disgorging themselves of their vast stash of treasuries. (Emphasis on 'appear'—China badly needs to maintain the impression that its currency is convertible in the dollar.) The stodgy economies of Japan and the UK have become the major holders. The United States is supposed to float its massive debt reissues to yesterdays-news buyers such as these? Duck and cover. 'Maybe the Fed will buy it!' he said risibly. How illuminating history can be on these issues. Let us cast our minds back not to the history of federal debt, but to that of the gigantic newcomer in the twentieth century, municipal debt, particularly of the school-bond variety. Readers will recall the column I wrote on the work of recent economics Nobelist Claudia Goldin, work that absolutely lionizes the tremendous boom in school, particularly high school construction over 1910-1940. The Nobelist forgot to tell us what it cost and what were the consequences of the financing model, namely unbelievably jacked-up property and new state-level income taxation. There is quite a case that financing this school-building caused, yes caused, the Great Depression. Thanks a lot, good government types. A few years ago, in the Marxist-adjacent journal Capitalism—quite a good journal, actually—appeared a most delicious article on school-bond financing in the golden era, the 1920s through the 1960s. (Michael R. Glass and Sean H. Vanatta's 'Frail Bonds of Liberalism' may be found here.) The finding of the article was that from the 1920s through most of the 1950s, the unprecedentedly massive new issues of school bonds basically had one buyer: state government employee pension plans. Here was the closed loop: districts planned schools, issued bonds, and raised taxes to in the hope of paying for them. The market was dubious, so another government agency, the pension plans, agreed to buy basically all of the bonds up all the time. It actually was a sound strategy for the funds in the 1930s and 1940s. Who wants to bet on corporate bonds, or stocks, in the 1930s? Property tax levels in 1932 soared to 7 percent of GDP, an absolutely unconscionable number that is utterly inconsistent with maintaining a viable private economy. Corporations were going down the drain in the 1930s. Pension plans wanted governments, governments, governments, because at least they had taxing authority. That authority was being abused to the tune of destroying the private economy, true, but all that meant is make sure you don't buy corporates. It was a ridiculous time, and school districts thought it normal. Governments got a little smaller after World War II (federal spending fell by 75 percent, 1944-46), and private business began to feel out its new place in the world. The stock market finally went up, achieving 1929 levels in the 1950s. Government pension plans noticed and thought it might be time to let their hair down and buy regular market securities, beyond school bonds, real corporates. So they did. The school districts threw a fit. We have a compact for you to back school construction, it's a civic duty to be our buyer, you're just looking out for number one, you're becoming a creature of Wall Street, etc., etc., was the gist of the complaint. One of the problems, a real beauty of one, was that federal tax rates were so high (91 percent at the top in the 1950s), that to hold school bonds, like all munis federally tax exempt, made zero sense in public pension plans, because those plans were also tax exempt. Tax-exempt plans should hold taxable bonds, because those bonds pay enough interest to cover taxation, and tax-exempt plans don't have to pay. So the New York system in particular said bye-bye to munis as the schools in their baby-boom boom cried. The article says that the borrowing costs increased sometimes to the tune of a new school every time a district issued a new tranche. Districts had to raise interest rates on their offerings past four percent on their fixed thirty-year issues in the late 1950s! Give it time—because did these districts ever make out like bandits. When the great inflation hit in the late 1960s, averaging about 9 percent for 13 years, these now silent grinning school districts were paying four percent on their huge long-term obligations. The little old lady holders were getting impoverished, as the districts got fat through the early 1980s on the late 1950s issues they had squealed about—four percent—but it's not about the sucker holders, is it? Government debt is a 'safe asset,' the economy needs it as a 'benchmark,' it is equivalent to a 'riskless security' in the financial models. All of this stuff is impeding the normal maturation of the market economy. Government debt probably caused the Great Depression, it deteriorated the welfare of widows and orphans in the stagflation period, and it is now all told at some unconscionable number in the many tens of trillions. The history of public debt in whatever variety it comes inevitably uncovers some new pathetic, or hapless, or lame, or sordid tale. Just start getting off the stuff.
Yahoo
24-02-2025
- Business
- Yahoo
The fertility crash comes down to what men are doing—or not doing—Nobel laureate says
Countries with low fertility exhibit a key difference from those with even lower birth rates, according to Nobel-prize winning economist Claudia Goldin, who pointed to the extra hours women spend on child-rearing and household chores compared with men. Falling fertility rates around the world have alarmed governments, tech execs like Elon Musk, and economists. While numerous policies and financial incentives have been employed, few have been proven to reliably boost fertility. But a new study from Nobel-prize winning economist Claudia Goldin points to the extra hours women spend on child-rearing and household chores compared with men. She found that was a major difference between countries with low fertility and those with even lower rates, or the "lowest-low" nations. In Sweden, for example, women spend just 0.8 hours more than men each day around the house, and the country's fertility rate is 1.7 kids per family. And in Denmark, women work 0.9 hours extra, and the fertility rate is also 1.7. To be sure, both rates are below the so-called replacement rate of 2.1 kids per family, which is needed for a country to maintain a stable population. But they exceed countries with even lower fertility. In South Korea, where the fertility rate is 0.9 kids, women put in 2.8 hours more than men on the home and family each day. And in Italy, where the fertility rate is 1.3, women do 2.9 extra hours. The US, meanwhile, has a Scandinavian-like fertility rate of 1.7, even though women do 1.8 more hours of work at home. In an interview the Washington Post columnist Heather Long, Goldin said men's assumptions about what other fathers are doing are important. 'It won't change unless the guy's expectations about what he's 'supposed to do' changes,' she explained. 'There's some evidence that individual men believe in couple equity more than they act on it because they believe other people don't feel this way.' As economies developed rapidly or experienced steep postwar recoveries, women entered the workforce in droves, clashing with some cultural norms. 'When you have rapid growth, then you don't give generations enough time to get used to modernity. You thrust them into modernity,' Goldin said. While her paper doesn't advocate for a particular policy solution, she told the Post that US lawmakers could provide government-subsidized child care, saying that's more critical than parental leave. The study comes as other data point to the crushing burden of caregiving. In latest Cost of Care report, the online marketplace for caregiving services found that 90% of parents lost sleep, 80% cried (with the number rising to 90% for mothers), 85% sacrificed other life goals, 73% lashed out at loved ones, 71% suffered health issues, and 29% considered suicide or self-harm. Meanwhile, a recent study from the McKinsey Global Institute said much of the world is facing a 'youth deficit' as people have fewer children, setting up top economies for population collapse. Some of those economies are on track to see 20%-50% population declines by 2100, requiring big changes to societies and governments operate. But if the demographic trends continue, younger people will endure slower economic growth while supporting bigger cohorts of retirees, eroding the historic flows of generational wealth, the study warned. 'The current calculus of economies cannot support existing income and retirement norms—something must give,' it said. This story was originally featured on
