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Gresser in Politico: Trump’s Nemesis, the US Trade Deficit, Hit Record High in 2024

Posted on by Max Sherrill

Trump has made reducing the trade deficit “to zero” a primary goal of his trade policy, White House trade counselor Peter Navarro said Tuesday at a POLITICO event where he blamed imports for millions of lost jobs, thousands of factory closings and a grim trail of divorces, alcoholism, drug addiction and death among America’s working class.

However, that’s a slanted view of imports, which lower costs for consumers and U.S. manufacturers, thereby supporting jobs in the United States, said Ed Gresser, vice president in charge of trade at the Progressive Policy Institute, a Democratic think tank. It also ignores the role that technology has played in manufacturing job losses, he said.

In addition, even though the goods trade deficit now is regularly above $1 trillion, it remains relatively small as a percentage of the U.S. economy, which has continued to grow over the years. In fact, the trade deficit is most likely to decline “when the economy goes really bad,” said Gresser, from the Progressive Policy Institute.

“The biggest trade deficit reductions we’ve had in the 21st century were during the financial crisis in 2009 and the Covid pandemic in 2020,” Gresser said. “That type of experience is quite effective at reducing trade deficits, but it always comes with many fewer jobs and depressed economies. It does not come with numerous openings of factories.”

Gresser, an economist and former U.S. trade official, said Trump’s first term provided a real-world example of why more tariffs won’t reduce the trade deficit.

That’s because the level of government spending plays a huge role in the macroeconomic factors that determine the size of the trade deficit. The Republican-led Congress cut far more in taxes during his first term than Trump raised in new tariff revenue, causing both the U.S. fiscal deficit and trade deficit to rise, Gresser said.

However, even if Republicans perfectly matched the multi-trillion-dollar cost of extending the 2017 tax cuts with trillions of dollars of new tariff revenue, that would not reduce the trade deficit, since the government’s fiscal deficit would remain the same, Gresser said.

“If you’re raising tariff rates and reducing income tax rates, the main thing you’re doing is shifting taxation from wealthy people to hourly wage workers and their families,” Gresser said. “That’s going to raise the cost of goods and have a big impact on reducing tax bills for the wealthiest people. Your impact on trade balance, if they offset exactly, will be nil.”

Canada, Mexico, and China are the U.S.’ three largest trading partners

Posted on by Alex Terr

FACT: Canada, Mexico, and China are the U.S.’ three largest trading partners

THE NUMBERS: Temperature tonight in Lewiston, Maine – -5°

* Accuweather forecast. Minus five degrees in Fahrenheit system; Celsius equivalent -20°.

WHAT THEY MEAN:

Following up on our statement on Mr. Trump’s attempt to raise tariffs on products from Canada, Mexico, and China last Saturday — a 10% tax on smartphones, laptops, and other Chinese-assembled products in place and 25% taxation of Canadian and Mexican-made stuff perhaps in a few weeks — here  are PPI’s four principles for response to tariffs and economic isolationism:

  • Defend the Constitution and oppose attempts to rule by decree;
  • Connect tariff policy to growth, work, prices and family budgets, and living standards;
  • Stand by America’s neighbors and allies;
  • Offer a positive alternative.

Regrettably, we’ll likely have a lot to say about these this year. Others, too. Here for example is Iowa Senator Charles Grassley on Monday, connecting tariffs to the daily farm economics:

“I plead w/ President Trump to exempt potash from the tariff because family farmers get most of their potash from Canada.”

Similar notes from other Republican Senators: Kevin Cramer (R-N.D.) worries about the loss of 80% of North Dakota’s export trade as, provoked beyond their normal good nature, Canadians publish retaliation lists; Susan Collins (R-Maine) thinks of Maine businesses and (noting this week’s Arctic-level Lewiston thermometer readings) fears a sudden spike in home heating bills:

“The Maine economy is integrated with Canada, our most important trading partner. Certain tariffs will impose a significant burden on many families, manufacturers, the forest products industry, small businesses, lobstermen, and agricultural producers. For example, 95 percent of the heating oil used by most Mainers to heat their homes comes from refineries in Canada.”

To put a number on this, Maine bought $2.73 billion worth of fuel oil, mostly for heating oil from Canada last year, so Mr. Trump’s midwinter 10% energy tariff would have hit the state’s 590,000 households with a new $270 million bill.

These tariff threats were only temporarily withdrawn Monday evening, though, and return in three weeks.  So before they do, some stats on their potential impact for energy, food, consumer goods, and industrial supply costs in the United States; then a thought on the options open to the Senators and Reps. making these sorts of complaints.

Crude oil: Canada supplies about 60% of America’s crude oil imports, and Mexico another 10%. Even setting aside refined products like New England’s home heating oil, the two countries together provide about 30% of the crude oil American refineries use for gasoline, jet fuel, and locally refined heating oil. The value of crude alone last year came to $107 billion, meaning a 25% tariff at face value raises the refineries’ bills by about $27 billion, with the bill coming due later on for families at gas stations and in heating bills.

Toys: China ships about 80% of U.S. toys — $12 billion in 2023 — and Mexico another 5%, suggesting higher costs for birthday parties this spring and Christmas presents further ahead.

Phones and TV sets: China likewise supplies about 80% of the smartphones sold in the U.S. (with Vietnam and India as the other two suppliers). For TV sets, the Chinese share is a more modest 50%, and the Mexican share is 10%.

Groceries: Mexico is the U.S.’ top source of winter vegetables and fruit, supplying grocery stores with about $2.5 billion worth of fresh produce each month in wintertime. Last month, we noted that in February of 2024, this came to 188,640 tons of tomatoes, 128,330 tons of peppers, 106,460 tons of avocadoes, and 44,440 tons of lemons and limes. Here are some more February 2024 purchases: 44,000 tons of fresh strawberries and 26,000 tons of raspberries, 110,000 tons of jalapenos and other chili peppers, and 97,450 tons of cucumbers. One could go on.

Auto parts: Of the $139 billion worth of auto parts American factories and repair shops bought last year from abroad, $65 billion worth came from Mexico, $16 billion from Canada, and $12 billion from China. So expect your U.S.-made car to cost more and your repair bills to rise along with the gas prices.

The toy/phone/TV tariffs may or may not stay on, and the threats to impose tariffs by decree on purchases from Canada and Mexico come back in three weeks.  What then are the Senators’ options? Their concern about rising costs for farmers and lobster boat captains, cold homes, threats to jobs, and stretched family budgets is actually linked very closely to the first principle of response — defend the Constitution and oppose attempts to rule by decree. The Constitution’s tariff clause is not at all blurry: “Congress shall have the Power to lay and collect Taxes, Duties, Imposts, and Excises.” So Republican Senators and Representatives have no need to plead for special carveouts and exemptions. They have all the power they need to keep potash and heating oil prices down, and to preserve Congress’ constitutional authority from Mr. Trump’s power grab, by voting. They just need to use it.

FURTHER READING

Trump administration “Fact Sheet” on tariffs:

… vs. Constitution, see Article 1, Section 8, assigning Congress power over “Taxes, Duties, Imposts, and Excises”.

… Canada retaliation list.

A Congressional perspective: 

A statement from the New Democrat Coalition.

And a preventive for this sort of stunt:

Reps. Suzanne DelBene (D-Wash.) and Don Beyer (D-Va.) have a bill to ban the use of the International Emergency Economic Powers Act (designed for response to the outbreaks of wars, pandemics, and so on) for creating tariff systems.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

A Response to Proposed Moves to Restrict TikTok

Posted on by Max Sherrill

This past November, Canada’s Liberal government ordered TikTok to dissolve its Canadian business operations on November 6. The act does not remove the ability for Canadians to download or access the app, or post content, but presents a significant business disruption. TikTok has challenged this mandate, filing an application for judicial review with Canada’s federal court. 

This follows a more aggressive move by the U.S. Congress and the previous presidential administration to ban U.S. providers from providing hosting and other web services to TikTok, unless ByteDance divests from the app by January 19, 2025. Following a last-minute intervention by President Trump, TikTok was able to continue operating past the deadline but has still not returned to U.S. app stores and cannot be updated. Additionally, President Trump’s directive may be challenged in court and could fail before a more permanent solution is found. 

The similar moves by the U.S. and Canada follow similar justifications. TikTok is owned by ByteDance, a Beijing-based company. According to TikTok, 60% of the company is owned by global investors, 20 percent is owned by its founders, and 20% is owned by its employees. And while it may be owned by a Chinese-based company, TikTok itself is headquartered in Los Angeles and Singapore. But as a result of ByteDance’s association with China, governments across the world have expressed concerns that influence by the Chinese government, which yields wide unilateral authority to affect corporate operations in the country, could be used to force tweaks to its algorithm to advance subversive content or misuse sensitive user data. The data at TikTok’s disposal is vast: the app has become a global phenomenon and economic powerhouse, attracting over 1 billion users worldwide. Over 170 million Americans and 14 million Canadians use the app. 

This follows western relations with China growing increasingly tense in recent years. The West widely views the Chinese government as a foreign adversary, and American public opinion of China, for example, hit an all-time low in 2024. 

While moves to restrict TikTok may seem like low-hanging fruit for hawkish policymakers, the proposals to do so do not address the real concerns that apps like TikTok, but also social media apps broadly, present to user privacy and security.

First, while concerns over national security risks by a known foreign adversary can be legitimate, Canada, the U.S., and various other countries have yet to present definitive proof that TikTok has misused user data or made material platform changes at the behest of the Chinese government. At this time, the justification for the laws targeting TikTok has been speculation. 

As others have also pointed out, there is a broader concern in the TikTok debate about data privacy than just TikTok itself. TikTok, like many social media websites, collects and stores user data to reform its recommendation algorithms and ad targeting. However, as many have pointed out in opposition to the TikTok restrictions, this is not a unique feature of TikTok. All social media sites collect a plethora of user data for similar purposes. But if data privacy is the true concern, banning TikTok is only a small remedy to this issue that does not address the wider systemic need. Laws like Canada’s PIPEDA or California’s CCPA make progress on addressing this issue, but don’t go all the way to address the concerns laid out by data privacy activists.

Furthermore, TikTok is not uniquely vulnerable as a tool for the use of foreign interference. During the 2016 election, Facebook was used by Russian actors in an attempt to influence American public opinion on a large scale, and smaller attempts were made to use Google and Twitter for similar purposes. No evidence has been presented that TikTok has been used for foreign interference efforts.

TikTok serves as a lucrative platform for users, creators, and small businesses across the globe to build a virtual community. If users cannot access TikTok, they will simply move to alternative apps that can pose comparable or even more significant threats. We’ve already seen evidence of this movement in the wake of the U.S. TikTok ban. During the week leading up to January 19, U.S. downloads of RedNote — one of China’s most popular social media apps — nearly tripled, and over 700,000 new users joined the platform.

Outlawing TikTok in North America would have resounding economic and political consequences. According to an Oxford Economics report commissioned by TikTok, the app contributed over $24 billion to the U.S. GDP and $5.3 billion in tax revenue to the U.S. government in 2023. Presumably, a scaled impact on the Canadian economy and workforce would occur, too. If TikTok closes its operations in Vancouver and Toronto, hundreds of local jobs would be eliminated. Going after TikTok in North America not only has resounding economic repercussions — it is also an increasingly unpopular political position among voters. As of August 2024, only 32% of American voters supported a TikTok ban, falling from 50% in March 2023. 

Forcing TikTok to dissolve its operations or outright banning the app is a temporary solution to the broader data and national security issues nations across the globe are facing. Federal governments can maintain the economic benefits of TikTok and act in accordance with the political interest of their voters, while preserving national security and protecting user data by adopting comprehensive data privacy policies.

Weinstein Jr. for Forbes: Seven Lessons For Elon Musk And DOGE

Posted on by Alex Terr

One thing all Americans should be able to agree on is that our government (and how it operates) leaves a lot to be desired.

Unfortunately, Elon Musk and his Department of Government Efficiency (DOGE) seem ready to bring the same kind of arbitrary and ego-driven reforms that cut the value of Twitter (now X) by 80%, to the federal government. As its name implies, DOGE is supposed to focus on improving efficiency. But instead of presenting reforms to streamline government sensibly, Musk’s initial forays are mostly focused on political retribution and a desire to gut the federal workforce no matter the cost to efficiency, expertise, and security.

For too long both Republicans and Democrats have shied away from the hard choices needed to reform the federal government. If President Trump and Musk continue on their current path, another window of opportunity will have been tossed away. Fortunately, there is time to halt the madness, and instead adopt a reform agenda that draws on successful government reform initiatives—like the first Hoover Commission (1947 to 1949) and the Clinton-Gore reinventing government (REGO) policies—that offer a clear roadmap on how to save taxpayers dollars and enhance government performance.

Read more in Forbes. 

Jacoby for Forbes: European Investment In The Ukrainian Defense Industry Threatened By Personnel Shuffle

Posted on by Alex Terr

In mid-2024, as the war in Ukraine ground into a third year and Western military aid showed ominous signs of flagging, Kyiv and its friends in Europe began moving toward a different approach: producing weapons closer to the fighting, on Ukrainian soil. This would require help from Europe and the U.S.—significant funding and oversight. But it promised in the long haul to reduce Ukrainian dependence on the West and, after the war, to provide a powerful new arsenal for Europe.

Denmark was the first country to participate, followed by other northern European nations, and early efforts were promising. Altogether in 2024, what became known as the “Danish model” provided more than a half billion dollars for Ukrainian weapons production, and the approach was warmly welcomed in Kyiv, with President Volodymyr Zelensky and others calling for its expansion in 2025.

Then, astonishingly, in late January, Ukrainian Defense Minister Rustem Umerov suspended the well-regarded director of the agency that had made the new approach possible by bringing transparency and accountability to the agency that purchases weapons and ammunition for the Ukrainian army.

Read more in Forbes. 

PPI Statement on President Trump’s Reckless Tariffs

Posted on by Alex Terr

WASHINGTON —  Today, Ed Gresser, Vice President and Director for Trade and Global Markets at the Progressive Policy Institute (PPI), issued the following statement in response to President Trump imposing a 25% tariff on goods from Mexico and Canada, and a 10% tariff on Chinese goods:

“Mr. Trump’s use of a bad-faith ‘state of emergency’ to launch a bizarre and unprovoked economic attack on America’s closest neighbors and largest export markets is bad economics and bad national security. If sustained, it will mean higher prices for American families on everything from heating oil to fresh vegetables and auto repair bills, increased production costs for American businesses and lost export sales for farmers and manufacturers, diminished American influence in the world, and likely new — in fact, unprecedented — North American security problems for all of Mr. Trump’s successors. It is also bad tax policy: while unable to raise the revenue a modern government needs for defense, retirement, and health programs, tariffs very efficiently shift tax burdens from wealthy households to hourly-wage families, and from services businesses like real estate and financial services to manufacturers, retailers, restaurants, construction firms, and agriculture.

“As damaging as all this will be, the systemic implications of this step for American governance are even worse. One-man creation of a new tariff system is an open invitation to future corruption, as — aware they can create new tariff systems by themselves — all future presidents will face temptation to use tariffs to punish critics and rivals, and to reward supporters and cronies. Still more fundamentally, it usurps Congress’ Constitutional power over ‘Taxes, Duties, Imposts and Excises,’ and substitutes rule by personal decree for legitimate legislation.  As such, today’s attempted action is a breach of the separation of powers and a threat to the Constitution.  House Speaker Mike Johnson, Ways and Means Committee Chairman Jason Smith, and their Senate counterparts Majority Leader John Thune and Finance Committee Chairman Mike Crapo, must oppose this power grab and, per the Congressional oath of office, support and defend the Constitution.”

PPI recently outlined four key principles for responding to tariff-driven economic isolationism. Additionally, PPI has warned of the economic risks posed by Trump’s tariff policies in a recent report and detailed these concerns in testimony before Congress and in PPI’s own coverage. For further context on the Constitution over tariffs and taxation and how the legislative, not executive branch, has the authority, see the full text of the U.S. Constitution.

Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI.

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Media Contact: Ian O’Keefe – iokeefe@ppionline.org

Manno for Forbes: K-12 Public Education Options Continue To Expand

Posted on by Alex Terr

National School Choice Week is a time to rediscover the embarrassment of rich educational opportunities in today’s K-12 public education. These opportunities include not only different school options like magnet schools, charter schools, and microschools. They also involve other educational options using open enrollment, dual enrollment, and career pathways programs. Many of these options have the added benefit of giving public school educators new options for their professional lives.

Read more in Forbes.

Marshall for The Hill: Climate Warriors Need a Smarter Strategy

Posted on by Alex Terr

Last year’s presidential election was a demolition derby for a host of progressive causes and illusions. Democrats are the biggest casualties of this collision with political reality, but Green New Dealers aren’t far behind.

President Trump’s triumphant return to the White House puts climate science deniers back in charge of national policy, at best retarding and at worst reversing America’s clean energy transition for the next four years.

After declaring a bogus “national energy emergency” last week (is he really unaware that U.S. oil and gas production has surged in recent years?) Trump issued executive orders pulling America out of the Paris climate accord, expanding drilling on public lands, blocking offshore wind and gutting former President Joe Biden’s clean energy initiatives.

Climate change was far from the voters’ top issue last November. In fact, the outcome underscored the failure of environmental activists to convince voters that it should be. Nor have they come close to forging a national consensus behind their demands to swiftly phase out fossil fuels and rely exclusively on renewables.

Read more in The Hill.

Gresser in Axios: What’s at Stake if Canada and Mexico Tariffs Happen

Posted on by Max Sherrill

Mexico is the country’s largest source of winter fruit and vegetable imports. Last February, U.S. grocery stores imported $2.25 billion worth of fresh produce from Mexico, per federal data analyzed by the Progressive Policy Institute.

  • That included 128,330 tons of peppers, 106,460 tons of avocados, and 44,440 tons of lemons and limes.
  • “Grocery stores rely very heavily on Mexico for about half (their) fresh produce imports,” says Ed Gresser, vice president at the institute.
  • “If you wanted to shift that to U.S. production it would be very hard. You’d have to go to a lot of greenhouses and it would be very expensive,” adds Gresser, a former assistant U.S. trade representative for policy and economics.

Keep reading in Axios.

Trump’s Federal Workforce Orders Unleash Chaos Without Meaningful Savings

Posted on by Max Sherrill

From our Budget Breakdown series highlighting problems in fiscal policy to inform the 2025 tax and budget debate.

President Trump spent the first full week of his second term in office rolling out a series of executive actions aimed at radically reshaping the federal workforce. While the administration framed the moves as a fiscally responsible culling of a bloated bureaucracy, they will, in reality, hinder critical government responsibilities, create uncertainty for both Americans and civil servants, and may even cost taxpayers more than they save. Ultimately, these chaotic measures are more about politicizing the federal workforce to advance the president’s extreme ideological agenda than they are about improving government efficiency for taxpayers.

Trump’s sweeping executive actions have cut deeply across the entire federal workforce. He has imposed a general hiring freeze across most federal civilian positions and demanded that agencies submit plans for reducing the size of their workforce. He has moved to dismantle any program that could be construed as related to diversity, equity, and inclusion (DEI), directing all affiliated staff to be put on paid leave and eventually laid off. He fired senior officials that he deemed insufficiently loyal to the administration, including inspectors general and federal prosecutors that traditionally operate with independence. And earlier this week, he offered to pay eight months’ salary to any of the 2.3 million individuals employed by the federal government if they agree to resign by February 6 — adding that agencies “are likely to be downsized” if people choose to remain.

This flood of orders has sowed chaos and confusion across the government. Agencies are unsure what programs and personnel are impacted by the vaguely worded directives, while demoralized civil servants wonder whether their roles will be eliminated as they try to manage day-to-day operations. And like the president’s short-lived order to freeze wide swaths of federal spending, many of these efforts are legally dubious. Agencies can only offer severance payments in lump sums of up to $25,000 — a number that most buyouts under this order would likely exceed. The president is also required to give Congress at least 30 days advance notice and written justification for firing inspectors general, which Trump’s purge blatantly ignored.

But even if these moves are legal, they will still wreak havoc on critical government functions while likely costing taxpayers more than they save. Not all the workers who would accept the Trump buyout offer are contributing to wasteful spending; many are talented civil servants doing critical functions of government work that the administration ostensibly supports, including air traffic control, cybersecurity, and law enforcement — including those implementing the president’s immigration priorities. Replacing these workers or retraining existing civil servants to do their jobs would take time and come at a significant cost to both effective governance and American taxpayers, as replacements would lack the experience of former employees and could lead to the delay or degradation of important federal programs and services that many Americans rely upon.

Even worse, these responsibilities might ultimately be reassigned to employees hired not for their qualifications but their unquestioning loyalty to the president, or to an even more bloated system of expensive federal contractors that is estimated to be at least twice the size of the federal workforce. Purging inspectors general is especially irresponsible, because these are individuals primarily responsible and best-equipped to identify waste or fraud in their respective agencies. Removing them not only increases the risk of fraudulent or wasteful spending, but diminishes their political independence to act as agency watchdogs.

Furthermore, payrolls are only a fraction of government spending, meaning that reducing them wouldn’t meaningfully improve the bleak fiscal situation highlighted in last week’s Budget Breakdown. In 2024, the federal government ran a $1.9 trillion budget deficit but spends less than $300 billion on civilian payrolls annually. In other words, even if every single civilian government employee accepted Trump’s buy-out proposal — and doing so did nothing to compromise government functions — the federal budget deficit would shrink by less than one-sixth. Moreover, those savings would be wiped out if Republicans proceed with their plans to extend the expiring provisions of the Tax Cuts and Jobs Act enacted in Trump’s first term, which are projected to cost more than $4 trillion over the next 10 years.

None of these arguments are meant to defend an ossified status quo in need of reform. It has now been more than three decades since President Bill Clinton undertook the last major effort to reinvent government, meaning a well-intentioned re-evaluation of how the sprawling federal bureaucracy of agencies, personnel, and programs could be streamlined to cut costs and better serve the American people is long overdue. But rather than pursuing any thoughtful reforms, Trump’s flood of directives reflects a ham-fisted attempt to dismantle checks and balances, purge the civil service of those he considers disloyal, and chaotically push an extreme ideological agenda at the expense of both American taxpayers and effective governance.

Deeper Dive

Other Fiscal News

More from PPI & The Center for Funding America’s Future

U.S. drug overdose deaths down 21.7% from 2023 to 2024.

Posted on by Alex Terr

FACT: U.S. drug overdose deaths down 21.7% from 2023 to 2024. 

THE NUMBERS: CDC estimates of U.S. deaths by drug overdose –

12 months ending August 2024:   89,740
12 months ending August 2023: 111,464
Full-year 2023 110,037
Full-year 2022 112,582


WHAT THEY MEAN:

From the Drug Enforcement Administration last Saturday, a report from Tucson:

“The United States Attorney’s Office for the District of Arizona announced today that extensive bilateral cooperation between the United States and Mexico resulted in Mexico’s Attorney General’s Office, Fiscalía General de la República (FGR), conducting a significant enforcement operation last week in Nogales, Sonora, to dismantle a prolific transnational drug trafficking organization operating along the U.S. Mexico border. The operation resulted in the arrest of two individuals in Mexico including the leader of the organization, Heriberto Jacobo Perez, and another member of the organization, Jesus Bernardo Rodriguez. Mexican authorities also seized four vehicles, two buildings, two firearms currency, a large number of fentanyl pills, and other controlled substances.”

Some background and then a wide-view look:

Deaths to drug overdoses in the United States rose fast and steadily for two decades. The Centers for Disease Control estimated 17,400 deaths in 2000, 41,500 in 2012, 43,697 in 2016, 92,500 in 2020, and peaks above 110,000 in 2022 and 2023. For context, the 112,582 deaths in 2022 is 50% above that year’s combined 42,514 deaths to car accidents (itself the highest traffic fatality figure in a decade) and 24,849 homicides. Synthetic opioids, in particular fentanyl, are the main cause, accounting for 87,155 or 78% of all American drug overdose deaths in 2023.

CDC’s most recent numbers show a startling change: drug overdose deaths turned down in mid-2023 and have been falling ever since. The CDC’s latest estimates cover August 2024. These report 89,740 overdose deaths over the 12 months since September 2023: a drop of 22,000, or 21.7%, from the 111,464 estimated from September 2022 to August 2023. Some states show even steeper drops, with North Carolina deaths down 51%, Virginia 32%, New Jersey and Ohio 30%, and Pennsylvania 27%. The decline is almost entirely in “synthetic opioids” such as fentanyl, for which the CDC estimates 79,815 deaths between September 2022 and August 2023, and 57,997 from September 2023 to August 2024. Extrapolating carefully from this 12-month number to individual months, and assuming no sharp change last autumn, the full-year 2024 toll would be somewhere between 70,000 and 80,000. This would be the largest one-year drop in deaths on record.

What explains this? Probably not any single factor, but complementary developments in three broad areas:

Source reduction abroad and at home: Last week’s Tucson event illustrates the value of U.S.-Mexican law enforcement cooperation. The Drug Enforcement Administration reports continuous pressure on the two large narcotics “cartels” responsible for most fentanyl trafficking, and notes that the 55.5 million fentanyl pills seized in 2024 test are somewhat less powerful — half contain potentially lethal doses, as opposed to 70% in earlier years — and so somewhat less likely to kill their users. (Administrator Milgram: “[F]ive out of ten pills being lethal is awful and we should not accept that. But it is significant progress in our fight to save lives, because it means that for every ten pills on the street, two fewer are deadly today.”) Nor are foreign countries the only sources: the fentanyl epidemic began with domestic prescriptions, and legal U.S.-based uses of opioids are declining, with prescriptions down from 154 million in 2019 to 125 million in 2023.

Treatment: Over the past four years, with harm-reduction support flowing from Congress to clinics and hospitals, testing and emergency treatment have become easier to find. The CDC, for example, notes that doses of Naloxone, chemically an “opioid antagonist” used to restore normal breathing during fentanyl overdoses via injection or nasal spray, doubled from 1.00 million in 2020 to 2.13 million in 2023.

Education: With schools, police offices, health services, and state governments informing the public about the particularly severe risk fentanyl carries — two milligrams in a single pill is a lethal dose — users are likely more aware of the danger and may be turning away from opioids.

In this larger view, DEA’s Saturday report from Tucson is another bit of encouraging news. Echoing Administrator Milgram, a year in which 70,000 or 80,000 people die of drug overdoses is a bad year. But it’s better than we’ve had in a while, with a drop large enough, and sustained long enough, to suggest that we might have turned a corner.

FURTHER READING

The CDC’s overdose data and mortality estimates through August 2024.

And via CDC’s data, deaths by drug overdose from 2000 to 2023, with a tentative estimate for 2024 based on the data available through August:

2024   75,000? 
2023 110,037
2022 112,582
2021 107,500
2020   92,500
2019   71,100
2016   63,600
2012   41,500
2000   17,400

 

Perspectives:

From Congress, Rep. Brittany Pettersen (D-CO) on a painful family experience and current work to raise community treatment and recovery capacity in last year’s “SUPPORT” Act.

From the Drug Enforcement Administration, a report from Tucson.

… background on fentanyl and its effects.

.. and DEA’s status report to the National Family Summit on Fentanyl last November from Administrator Anne Milgram, covering indictments, diplomatic and law-enforcement engagements with China and Mexico.

From the National Institutes of Health, an introduction to Naloxone.

And back to the CDC for data on Naloxone doses from 2019 to 2023 nationally and by state, along with domestic opioid prescriptions and Buprenorphine delivery.

And some international context:

UN’s Office on Drugs and Crime’s World Drug Report 2024 reviews drug production, transport, health, and other policy matters around the world. They estimate 60 million opioid and opiate users worldwide, including 9 million in North America, in a global drug-user population of 292 million.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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Former UK Labour Party Chief David Evans Joins PPI

Posted on by Alex Terr

The Progressive Policy Institute (PPI) is pleased to announce that David Evans, Baron Evans of Sealand, former General Secretary of the UK Labour Party, has joined PPI as a senior advisor. In his new role, Evans brings decades of political expertise to PPI’s Project on Center-Left Renewal, which fosters PPI’s ongoing dialogue with center-left parties across Europe and the world.

Evans served as General Secretary of the Labour Party from 2020 to 2024. During this time, he helped modernize the party’s structures and shape its strategic direction under Prime Minister Keir Starmer’s leadership. In addition to spearheading Labour’s 2024 general election campaign, his career includes playing a key role in Labour’s 1997 and 2001 election victories; pioneering work to promote cohesion, community engagement, and behavior change; and informing public policy and political strategy. During his tenure as general secretary, Labour secured 411 seats in the UK Parliament, their largest majority government in a quarter-century.

PPI’s Project on Center-Left Renewal, launched in 2023 and based in the United Kingdom, continues a long-running conversation with center-left parties in Europe and around the world. Its purpose is to exchange ideas, strategies, and tactics for making center-left parties more competitive and improving their governing performance. Led by Claire Ainsley, former Executive Director for Policy for Prime Minister Keir Starmer, the project has contributed immensely to a renewed transatlantic dialogue between Labour and Democrats.

As part of its commitment to revitalizing center-left politics, PPI recently released an in-depth analysis of the 2024 United States presidential election, co-authored by PPI President Will Marshall, Ainsley, and Deborah Mattinson. The report examines the key factors behind the Democratic Party’s electoral loss and offers a roadmap for reconnecting with working-class voters. Drawing lessons from the successes of the Labour Party and other center-left successes in Europe, the report outlines strategies for building durable governing majorities and addressing the economic and cultural concerns of working families.

“I am honored to join the Progressive Policy Institute and contribute to the Project on Center-Left Renewal,” said Evans. “In my tenure with the Labour Party, we demonstrated that with the right strategies and organizational focus, progressive parties can regain the trust of the electorate. I look forward to collaborating with colleagues at PPI to share insights and develop policies that resonate with working people across the globe.”

“David Evans is a key architect of the UK Labour Party’s revival and sweeping victory in last year’s elections,” said Marshall. “As Labour’s General Secretary, Evans worked closely with now Prime Minister Keir Starmer to help his party change course after its calamitous 2019 defeat and reconnect with its working-class base. That is fundamentally the same challenge Democrats face now. We’re proud that David has agreed to join forces with PPI as we work on revitalizing center-left politics here and abroad.”

“Lord Evans was central to reforming the UK Labour Party and making it electable again,” said PPI Chief Executive Officer Lindsay Mark Lewis. “His strong leadership took a center-left Party that had lost the trust of voters across the UK and took the party into a new era of election victory. His experience and lessons learned is something center-left leaders across the globe can learn from.”

Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI. 

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Media Contact: Ian O’Keefe – iokeefe@ppionline.org

Jacoby for Forbes: Amid A National Conscription Crisis, One Ukrainian Unit Takes A Different Approach

Posted on by Max Sherrill

Denys Rizhov, 21, stumbled on the Third Assault Brigade’s drone school, Kill House, by accident—a random link to a YouTube video. A soft-spoken, reserved young man with a ponytail, bored by college, working odd jobs and uncertain what his future would bring, Rizhov was intrigued enough to follow up on the web. The more he learned, the more he liked, and he decided to start saving the $190 it would cost for a week of classes in the technology and tactical use of unmanned aerial vehicles.

He scrimped and saved for months, and when he finally took the course, he couldn’t have enjoyed it more. Now he’s planning to go back for further training—a second week of drone school and then the Third Assault Brigade’s intensive seven-day course that tests volunteers interested in joining the unit.

At a time when the lion’s share of Ukrainians is frightened of joining the armed forces or actively resisting it—hiding from recruiters and scheming to flee the country illegally—Rizhov is increasingly drawn to enlisting in an elite combat unit, attracted by evolving drone technology and what he’s seen of the Third Brigade’s bracing ethos.

Continue reading in Forbes.

PPI Unveils Child Opportunity Account Proposal to Promote Financial Capability And Boost Upward Mobility for Working Families

Posted on by Alex Terr

WASHINGTON — Despite America’s long-standing reputation as the land of opportunity, social mobility in the United States has declined in recent decades, leaving millions of children from low-income families unable to climb the economic ladder. Many young Americans face a combination of limited access to resources and low levels of financial literacy, preventing them from fully realizing their potential. These structural barriers not only perpetuate inequality but also stifle economic growth by leaving untapped talent behind.

To address these challenges, the Progressive Policy Institute’s Center for Funding America’s Future today released a new report, “Building Opportunity and Financial Capability with Child Opportunity Accounts,” outlining an innovative new proposal for Child Opportunity Accounts (COAs) that would help young Americans build both the financial resources and knowledge that they need for long-term success. The report, authored by Ben Ritz and Alex Kilander, emphasizes how this program can complement existing anti-poverty initiatives while fostering self-sufficiency and economic opportunity.

“Other proposals to promote childhood savings don’t equip young Americans with the financial education needed to properly leverage and continue growing those savings,” said Ben Ritz, PPI’s Vice President of Policy Development and Director of the Center for Funding America’s Future. “PPI’s proposed Child Opportunity Accounts are a fiscally responsible, forward-thinking solution to give children from working families access to the same financial resources and skills-building opportunities enjoyed by their wealthier peers.”

Key Features of Child Opportunity Accounts:

  • Universal Accounts: Every child receives an account with a $700 initial balance at birth, managed by a private partner institution and invested in a diversified portfolio to generate strong real returns. This universality bypasses the administrative burdens of determining a child’s eligibility and builds political durability by ensuring that every family can benefit from a COA. 
  • Progressive Government Contributions: Annual deposit of up to $700 for children in households earning less than 400% of the federal poverty line, giving the greatest support to those least likely to benefit from intergenerational wealth.
  • Integrated Financial and Civic Education: Integrated financial literacy resources, skills assessments, and use restrictions for young adults encourage beneficiaries to responsibly manage and grow their wealth. Additional accountability measures strengthen the civic compact by reinforcing young Americans’ responsibility to positively give back to the nation.
  • Fiscally Responsible: PPI’s COA proposal would cost less than half as much as other “baby bonds” proposals, doesn’t rely on expensive budget gimmicks or regressive tax incentives, and includes suggested offsets to ensure the wealth created by these accounts is not canceled out by a higher national debt.

“This isn’t just about providing financial assistance,” said Alex Kilander, policy analyst at PPI’s Center for Funding America’s Future. “By tying the program to financial education, we’re empowering young Americans to take charge of their futures.”

Read and download the report here.

Launched in 2018, the Progressive Policy Institute’s Center for Funding America’s Future works to promote a fiscally responsible public investment agenda that fosters robust and inclusive economic growth. To that end, the Center develops fiscally responsible policy proposals to strengthen public investments in the foundation of our economy, modernize health and retirement programs to reflect an aging society, transform our tax code to reward work over wealth, and put the national debt on a downward trajectory.

Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI. 

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Media Contact: Ian O’Keefe – iokeefe@ppionline.org

Building Opportunity and Financial Capability with Child Opportunity Accounts

Posted on by Alex Terr

America has long had a reputation as the land of upward mobility and equal opportunity. In recent decades, however, the United States has scored lower on measures of social mobility than many other economically advanced countries. This decline in upward mobility is driven by a stark inequality of opportunity early in Americans’ lives.

Regardless of their merit, many Americans often don’t have access to the opportunities they need to succeed, or must pay a heavy price for the same opportunities that their wealthy peers often get at no cost. Young adults from disadvantaged backgrounds might lack assistance paying for education without relying on burdensome debt or generous scholarships, struggle to secure well-paying job opportunities and professional connections, or be unable to rely on family help to cover emergency costs.

Compounding the problem is a low level of financial capability, also known as financial literacy. According to a survey by the Global Financial Literacy Excellence Center, respondents could give correct answers to a set of basic financial questions about saving and investing only 48% of the time. Financial literacy is especially low among the young, who have little experience with financial decision- making. This makes them particularly prone to making poor financial decisions early in life, which can set them back for years. Put together, unequal access to opportunity combined with low levels of financial literacy limit social mobility for children in low-income families.

As a result, many Americans remain stuck on the lower rungs of the economic ladder through no fault of their own. Remedying this inequality is not merely a moral problem, but an economic one. Talent is more evenly distributed than opportunity. Amongst the millions of Americans who lack promising opportunities or financial stability could be the founder of the next great American company or a scientist behind the next medical breakthrough. All young Americans should have the opportunity and habits to build a successful and financially stable future for themselves.

Child Development Accounts (CDAs) are one potential tool to address these problems. CDAs are accounts designed to help children and their families, especially low- and middle-income ones, build wealth for the future. Countries around the world, such as Singapore and Israel, have long had formal CDA policies. Several U.S. states, including Oklahoma, Maine, and Rhode Island, have also pioneered their own programs and found some success in improving opportunity and financial literacy for participants. There are also many proposals to establish CDA-like accounts at the federal level, the most prominent of which is a “baby bonds” proposal sponsored by Senator Cory Booker and Congresswoman Ayanna Pressley. However, as detailed more throughout this report, this plan is expensive, relies on accounting gimmicks to create the false appearance of wealth creation, and does little to help children build financial capability to grow wealth on their own.

PPI proposes instead to create “Child Opportunity Accounts” (COAs) that would better promote equal opportunity, self-sufficiency, and financial capability for all children. As the first section of the paper explains, these accounts would be universal: every child would receive an account at birth with a $700 balance, automatically invested in a diversified investment vehicle. Then, every year on the child’s birthday up to their 16th birthday, the government would make additional contributions of up to $700, depending on a household’s income. The universal provision of accounts provides all children a shared educational experience building wealth at relatively low cost to taxpayers, while the means-tested annual contributions ensure the most financial assistance goes to children whose parents would otherwise struggle to give them the same “starting capital” in life as their wealthier peers.

The next section focuses on how the accounts would help children and parents acquire the financial understanding and habits to effectively manage their assets. To help young Americans build financial capability, information about important topics would be embedded into the access portals for the accounts, and account holders would be required to pass a financial literacy assessment before accessing their funds at adulthood. This financial education can occur both in formal classroom settings and via informal family socialization.

This report then examines how account holders can use their COA savings to pursue opportunities, laying out allowable uses for withdrawals and guardrails to ensure they do not exhaust the account balance too quickly. Young adults would be permitted to withdraw up to 25% of the balance per year between ages 18 and 25 to use for a number of “qualified uses,” including education, health care, starting a business, a down payment for a house or car, select moving expenses, and/ or saving for retirement. Once they have reached age 25, account owners would be able to withdraw the remainder of the funds without adhering to the 25% limit. The report also explains how COAs can help establish a civic compact for America’s youth that reinforces their responsibility to positively give back to the nation, rather than merely acting as a new entitlement.

Finally, PPI offers several fiscally responsible options to pay for these accounts, so that the wealth they build for young Americans won’t be canceled out by a higher public debt burden that they will be forced to service. One particularly fitting pay-for, which PPI detailed in another major report last month, is reforming the taxation of inheritances. This pair of policies would work in tandem to equalize opportunity by taxing the birthrights of people born in the richest 1% of households to give every American child a birthright of their own. And unlike other welfare schemes, this combination of policies would neither give handouts to adults who could otherwise have earned the money themselves nor confiscate a single penny that someone earns through their own hard work to pay for it.

Read the full report.