Feature
Changing public structures and priorities
Since the mid-1980s, public investments as a share of overall GDP have been allowed to fall to levels not seen since before the federal interstate system was constructed, hitting a 40-year low in 2001.
The NAIRU ( “non-accelerating inflation rate of unemployment”) is the theoretical unemployment rate below which the economy will begin to overheat, leading to inflation growth. Despite the notorious difficulty in measuring it, the NAIRU has been a central guidepost of economic policy for decades. Before 1979, however, policy makers were as likely to miss the NAIRU on the down side as on the up side. Since then, policy makers have been much more likely to allow the economy to sit for extended periods above the NAIRU, representing a policy shift that prioritizes low rates of inflation over low rates of unemployment.
While the bottom 80% have seen effective federal tax rates that have been roughly stable, rates for the richest fifth have fallen markedly over time—interrupted only by small increases at the beginning of the Clinton Administration.
