This century has witnessed a populist revolt against long-dominant political parties across the democratic world. It’s rooted in working-class discontent with sweeping economic and cultural changes that have bred a profound sense of social dislocation and insecurity.
This phenomenon challenges governing parties of the left and right. But it poses a special test to the U.S. Democrats and other center-left and progressive parties that have traditionally championed the economic prospects and moral outlook of traditional working people.
The new populists offer working-class voters a refuge in old ideas: ethnic nationalism, nativism and protectionism. Conservative parties have tried to compete by co-opting these themes. Liberal and progressive parties have deplored the populists’ illiberal and antidemocratic tendencies while failing to grasp their valid concerns and fears of not being heard.
The Progressive Policy Institute believes America and other liberal democracies need a reinvigorated center-left to turn back the tide of reactionary nationalism that has swept much of the world over the past decade. In January 2023, we launched a new Center-Left Renewal Project headed by Claire Ainsley, formerly a top policy advisor to UK Labour Party leader Keir Starmer.
As it happens, both Labour and the Democrats face crucial national elections next year. While allowing for significant differences in political structure and culture, reconnecting with their historical working-class base is an electoral and moral imperative for both parties.
To help them frame more effective appeals to working-class voters (broadly defined as those without four-year college degrees) the Project commissioned from YouGov public opinion surveys in the United Kingdom and the United States. The former is found in Claire Ainsley’s report, Roadmap to Hope, which was released in October at the Labour Party Conference in Liverpool.
This U.S.-focused companion report, Winning Back Working America, has two parts: a national survey of 860 non-college voters and oversamples of working-class opinion in seven 2024 presidential or Senate battleground states: Michigan, Montana, New Hampshire, Arizona, Georgia, Pennsylvania and Nevada. The interviews were conducted between Oct. 17 and Nov. 6.
Here are some of the key findings of our poll, followed by the national sample. The state oversamples and crosstabs are available on request.
Standards for connectivity have evolved to reflect the transition to the online world, where fast internet connection is now a prerequisite for integral services such as education, healthcare, and access to the global economy. It is more important than ever that Americans have access to reliable, updated broadband options, and that both federal and state policy support the availability of these services. Yet, in California, outdated regulatory requirements may be holding the state back from widespread updates to network infrastructure needed to connect underserved communities to the benefits that come with high speed internet access.
Today, the Progressive Policy Institute (PPI) released a new policy brief titled “The Opportunity Cost of Maintaining Copper Networks in California,” analyzing the challenges and costs posed by regulatory requirements to maintain outdated copper networks in California. Report author Malena Dailey, PPI’s Technology Policy Analyst, quantifies these costs in her brief and highlights the importance of updating policy to ensure that California can efficiently allocate available resources to expand broadband connection across the state.
Companies designated as Carriers of Last Resort in California are required to maintain the copper wires that carry voice traffic to certain customers, an expensive and arduous process which prioritizes legacy technology over modern network infrastructure. Though it is critical that connections are maintained in places where there are no alternatives, requiring maintenance of these networks may prevent reallocation of investment towards connecting rural communities to updated broadband.
“California can advance its broadband goals by allowing the replacement of copper networks, empowering access to the next generation of technology for those who have previously lacked access to the benefits of online services,” said Malena Dailey. “For California to reap the full benefits of private and public investment in telecommunications infrastructure, it is critical that state policies enable service providers to invest in new technology rather than sink resources into maintaining legacy copper networks.”
The Progressive Policy Institute (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. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.
Standards for connectivity have evolved to reflect the transition to the online world, where fast internet connection is a prerequisite for integral services such as education, health care, and access to the global economy. As such, it has become more important than ever that Americans have access to reliable, updated broadband options, and that both federal and state policy support the availability of these services.
In California, these priorities have been recognized by Governor Newsom, who signed legislation directing $6 billion to expand broadband coverage for all Californians in 2021. “Delivering broadband to all is essential to California’s success,” says Newsom. “Access to high-speed internet can mean the difference between launching a successful career and being without work.”
Meanwhile, the Biden administration has made a federal commitment to expanded service, with $65 billion being allocated for broadband deployment as part of the infrastructure Investment and Jobs Act in 2021. Of this funding, at least $1.86 billion is being directed to California through the Broadband Equity, Access, and Deployment (BEAD) program, directed specifically towards underserved and high-cost areas.
The influx of government support and rising consumer demand have enabled internet service providers to invest heavily in highspeed, high-capacity wireless and fiber cable connections. However, in the face of California’s ambitious goals for widespread coverage, the transition needed to enable the modernization of network infrastructure may be hampered by longstanding regulatory requirements.
By designating certain service providers as “carriers of last resort,” some states impose requirements to provide basic telephone service to all customers within a designated service area. The intention is to ensure all consumers have access to voice services, especially in rural and underserved locations. Today, companies are required to continue to
maintain the copper wires that carry voice traffic, rather than working to replace legacy networks with updated technologies that provide modern internet services. Though the FCC addressed this at a federal level through a 2019 order, California is one of at least 38 states that continue to impose such requirements on carriers.
Now, with rapidly improving standards for connectivity in an ISP market that has proved more competitive over time, the monetary and opportunity costs associated with the state requirement to maintain deteriorating copper networks are mounting. This policy brief quantifies these costs and highlights the importance of updating policy for network infrastructure to ensure that California can efficiently allocate available resources to expand broadband connection across the state.
The federal government is in desperate need of a fiscal correction. In just the last year, the annual budget deficit more than doubled from $933 billion to $2 trillion. Such explosive growth in federal borrowing might be warranted to combat an economic emergency such as the COVID pandemic, when the unemployment rate soared to 13%. But unemployment in both 2022 and 2023 has consistently been under 4% — a level not seen for such a prolonged period since the 1950s. Among economists, it’s axiomatic that in boom times such as these the government should be paying down its debts, not running them up.
The problem is only set to get worse in the coming years as deficits continue to grow with no end in sight. This borrowing comes at an enormous cost: annual interest payments on the national debt are at their highest level as percent of economic output since they peaked in the 1990s. By 2028, the government is projected to spend more than $1 trillion each year just to service our ballooning debts — more than it spends on national defense. The United States is potentially entering a vicious cycle whereby higher deficits lead to both a larger stock of debt and higher inflation, which the Federal Reserve must combat by raising the rate of interest paid on both public and private debts. These skyrocketing borrowing costs threaten to crowd out other critical public investments and slow economic growth.
What a difference a few weeks makes. When I left Kyiv in September for a short trip to the U.S., the late summer weather was perfect and the mood in Ukraine was upbeat and determined. There had been heavy fighting on the southern and eastern fronts — the long-awaited counteroffensive was going more slowly than many had hoped.
But by and large, the country I left was the Ukraine the world had been rooting for since February 2022: Little David pushing back against the Russian Goliath — plucky, resourceful, resilient and still surprising us with successes on the battlefield.
By the time I returned to Kyiv, the world had turned upside down. Hamas terrorists had launched a 21st century pogrom in southern Israel. Israelis were retaliating with overwhelming force in Gaza. Worst of all for Ukraine, the U.S. aid Kyiv relies on to prosecute the war was in jeopardy, with a largely friendly Senate and far less supportive House on a collision course as they debated President Biden’s request for another $61.4 billion in military and humanitarian support.
The mood in the city was subdued — as one of my friends put it, this is a “dark moment.” An early burst of support for Israel — huge blue and white flags projected on landmarks and billboards across Ukraine — had subsided into worry. Would the fighting in the Middle East steal the world’s attention? With winter approaching and more of last year’s brutal blackouts looming, stores were filled with shoppers buying bottled water and canned goods. The residents of my apartment building chipped in for an industrial generator.
A good movie director would use a split screen: on one side, Washington, D.C., bitterly divided and uncertain about continuing aid to Ukraine and, on the other, Brussels, where both the legislative and executive arms of the European Union (EU) are standing firm in their support for Ukraine. Last month, members of European Parliament voted overwhelmingly in favor of €50 billion ($53.4 billion USD) in continued aid, and this week, the European Commission recommended that talks about Ukrainian membership in the EU should begin early next year.
Many Americans are skeptical of the EU and loath to admit it might know something we don’t know. Yet, Washington should take a page from Brussels’ book — not just its support of Ukraine’s fight to defeat Russian aggression, but also its understanding of what’s at stake for Europe — and the U.S. — as Ukraine evolves toward a fully democratic market economy aligned with the West.
Living in Kyiv, you learn to put up with air-raid alerts. Sirens wail over the city, and an app blares from your phone, warning you to shelter from incoming missiles. In the industrial city of Zaporizhzhia, 25 miles from the front line of the Ukrainian counteroffensive, people shrug off the sirens, which sound a half dozen times a day and often more. “It’s just Russian music,” one local official joked when I visited recently, “bad Russian music.”
What matters in Zaporizhzhia: not warnings but actual explosions, which have left ugly scars across the city, including many boarded-up buildings on the main street. Yet few people take shelter even when they hear a nearby blast or see a plume of dark smoke on the horizon. “I used to be afraid,” explained one young woman who runs an online business. “But you get used to it. Everyone is used to it. Now we just get on with our lives.”
For many, “the front” evokes World War I trenches at Verdun and the Somme or the carnage a generation later at Stalingrad and the Battle of the Bulge. Zaporizhzhia isn’t on the line of contact; there are no trenches or firefights in the streets. But the fighting outside town hangs over the city, ever-present and menacing in a way you don’t feel in Kyiv.
I’d been to Zaporizhzhia before—two trips last spring before the start of the counteroffensive—and I returned this fall full of apprehension. It’s a city with a long history of warfare: first, as the home of the 17th-century Cossack fighters who defended the territory that is now Ukraine from Russian, Polish, and Crimean invaders and then, later, the site of bitter battles between the Nazis and the Red Army. What I wondered now: How was the city holding up as the grinding counteroffensive dragged into its fourth month?
America’s health insurance system is undergoing a massive disruption in coverage, specifically for adults enrolled in Medicaid and for children enrolled in the Children’s Health Insurance Program (CHIP). On April 1, 2023, four months after the COVID-19 public health emergency declaration ended, states resumed their Medicaid and CHIP redetermination process and since then, troubling data has been emerging from states about what is happening to the 93 million Americans — nearly one in four — who gained Medicaid or CHIP coverage during the health care emergency.
Today, PPI released a new policy brief titled “Medicaid and CHIP Redetermination: Mitigating Coverage Loss,” analyzing the impact redetermination has had on healthcare coverage across the country. Report author Erin Delaney, PPI’s Director of Health Care, examines what actions have been taken at the federal level to mitigate coverage loss, the trends of current redetermination data, and policy changes that both states and the federal government can embrace to ensure that millions of Americans don’t fully lose their access to health coverage as the country transitions out of continuous coverage.
Seven months into this monumental coverage transition, the U.S. has hit a new disenrollment milestone. As of Nov. 1, at least 10,046,000 Medicaid enrollees have been disenrolled based on the data from 50 states and the District of Columbia. Millions more are expected to lose coverage in the coming months. Worse, in the 20 states that report age breakouts, children account for about four in ten of these Medicaid disenrollments.
Most concerning among recently reported redetermination data is that 71% of people have been disenrolled due to procedural glitches, meaning states have outdated contact information, enrollees are increasingly confused by the paperwork, or are missing deadlines for completing renewal packets. And that’s not all — confusion abounds, as adults and children may or may not still be eligible for Medicaid and CHIP, may have other coverage options, or may remain eligible for Medicaid or CHIP but don’t know it.
“America is facing a crisis in health care coverage, the largest transition in coverage since the first open enrollment period of the Affordable Care Act. More than 10 million Americans are losing health care coverage and millions more are expected to lose coverage in the coming months,” said Erin Delaney. “Both state and federal lawmakers must take immediate action and focus on improving data collection and state utilization of available CMS waivers and flexibilities, maximizing coordination with various stakeholders, and continued intervention in states with high procedural termination rates.”
The Progressive Policy Institute (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. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.
The Largest in Health Care Coverage Since the Start of the Affordable Care Act
INTRODUCTION
America’s health insurance system is undergoing a massive disruption in coverage, specifically for adults enrolled in Medicaid and for children enrolled in the Children’s Health Insurance Program (CHIP). On April 1, 2023, four months after the COVID-19 public health emergency declaration ended, states resumed their Medicaid and CHIP redetermination process, which had been suspended during the pandemic. Troubling data is emerging from the states about what is happening to the 93 million Americans — nearly one in four — who gained Medicaid or CHIP coverage during the health care emergency.
Medicaid and CHIP enrollment grew substantially throughout the emergency due to the combination of the pandemic recession, new “continuous coverage” requirements and money from the federal government, and belated decisions in Nebraska, Montana, and Oklahoma to expand Medicaid under the Affordable Care Act (ACA). As a result, an additional 20.2 million Americans gained health care coverage.
Spiking unemployment rates caused millions of Americans to lose their employer-sponsored health insurance along with their jobs. Unemployment peaked at 14.7% in April 2020. By May, an estimated 27 million workers and their dependents had lost their health plans. Not surprisingly, the biggest increases in uninsured people were seen in states that had declined to expand Medicaid under the ACA.
Hit hardest by loss of coverage were mostly men, people aged 27-50, Hispanics, and low-income families. In response, Congress passed the 2020 Families First Coronavirus Response Act (FFCRA), which expanded enrollment in state Medicaid and CHIP programs from 71 to 94 million. In addition, more Americans purchased private health plans in the ACA’s individual insurance Marketplace. As a result, during the emergency the U.S. uninsured rate actually dropped to a historic low of 8.6% in 2021.
Now that the continuous enrollment has ended, an estimated 17.4% of Medicaid and CHIP enrollees (15 million) are projected to lose coverage. Some experts have estimated that disenrollments could range from 8 to 24 million. The Department of Health and Human Services (HHS) predicts that nearly 7 million eligible people could lose coverage for “procedural” reasons. This refers to situations in which states have outdated contact information due to misunderstanding or confusion the enrollee has on the paperwork, or they did not complete the renewal packets within the deadline.
The Congressional Budget Office (CBO) estimates that 6.2 million Americans will lose coverage in the redetermination process and will fully become uninsured, and an estimated 5.3 million children are anticipated to lose their coverage as well. HHS estimates that a third of those who will be at risk for losing Medicaid coverage are Hispanic, and 15% are Black. Unfortunately, the current data coming out of most states does not include a breakout of demographic groups. CBO estimates that this will swell the ranks of the uninsured by over 10% by 2033.
As of November 1, 2023, at least 10,046,000 Medicaid enrollees have been disenrolled based on the data from 50 states and the District of Columbia. Because there are varying lags of when states report data, this is likely an undercount of the actual number of disenrollments. There is also substantial variation in the disenrollment rates among these reporting states as each state has different approaches to managing its redetermination process. “Most concerning among recently reported redetermination data is that 71% of people have been disenrolled due to procedural glitches. Examples include states that have outdated contact information, enrollees confused by the paperwork, or missing deadlines for completing renewal packets. Confusion abounds, as adults and children may or may not still be eligible for Medicaid and CHIP, may have other coverage options, or may remain eligible for Medicaid or CHIP but don’t know it.
Throughout the redetermination process, people will lose Medicaid coverage because their income has increased as the economy has recovered. Disenrollment rates will vary according to differences in how the states approach redetermination. Those who are no longer eligible for Medicaid may be able to find coverage through the ACA Marketplace. They’ll be eligible for premium tax credits if they don’t have employer-sponsored health insurance that is considered affordable, meaning the employee share of premiums doesn’t exceed 9.12% of income in 2023. HHS estimates that nearly 3 million people could get ACA plans, while 5 million people who are disenrolled from Medicaid will gain coverage through their employers. While it will be critically important for those who are deemed ineligible for Medicaid to gain coverage through the exchanges or their employer, copays and out-of-pocket costs may be higher than Medicaid, making those coverage alternatives less affordable for some. Additionally, a KFF analysis shows that very few adults and/or children who lose their Medicaid and CHIP coverage will seamlessly transition to the ACA’s individual insurance exchanges. The most recent coverage transition data shows that roughly two-thirds (65%) of those who were disenrolled from Medicaid in 2018 had a period of uninsurance in the year following disenrollment and only 26% enrolled in another source of coverage for the full year following disenrollment.
Notably, more than half of children in the U.S. receive health care coverage through CHIP or Medicaid. CHIP covers children whose family earns too high of an income to qualify for Medicaid but do not earn enough to afford private health insurance. Unfortunately, parents who are getting notified that they’ve lost their Medicaid coverage don’t always know that their child still qualifies, resulting in further confusion on coverage options. Parents then try to enroll their children in a Marketplace plan that doesn’t always have the correct benefits for children, when they should be receiving coverage through CHIP. Both Medicaid and CHIP benefits are better designed to meet the needs of children, provide more comprehensive benefits, and are more affordable than private plans. There are certain limits on costs for care in CHIP and CHIP has been shown to be a more affordable option than employer-sponsored and Marketplace coverage. It’s clear that moving from Medicaid and CHIP to other forms of coverage demonstrates how important it is for a strong, coordinated response from the federal and state governments to mitigate disenrollments, especially for those who are disenrolled due to procedural reasons.
This significant gain in health coverage for millions of Americans saved countless lives, reduced suffering, and highlighted the importance of sound policies to make coverage more affordable and accessible, while incorporating coverage for telehealth services and for COVID-19 testing and vaccination. This period of continuous coverage is likely the closest the U.S. has gotten to universal coverage, making a smooth transition out of the PHE and mitigating coverage losses throughout the Medicaid redetermination process that much more critical. Despite the loss of the emergency expansion of coverage and the anticipated ineligibility of those who had this access, it is crucial to ensure that those who are deemed ineligible for Medicaid and CHIP are able to find alternative coverage options.
Given the enormity of this challenge and the impact that it will have on millions of Americans, this redetermination process has been deemed the largest transition in health care coverage since the first open enrollment period of the Affordable Care Act (ACA). PPI believes that both state and federal lawmakers should focus on improving data collection and state utilization of available CMS waivers and flexibilities, maximizing coordination with various stakeholders, and continued intervention in states with high procedural termination rates.
This policy brief examines what actions have been taken at the federal level to mitigate coverage loss, the trends of current redetermination data, and policy changes that states and the federal government can embrace to ensure that millions of Americans don’t fully lose their access to health coverage as the country transitions out of continuous coverage.
Today, Ben Ritz, Director of the Progressive Policy Institute’s (PPI) Center for Funding America’s Future, released the following statement in support of the bipartisan Fiscal Stability Act introduced in the Senate today:
“PPI commends Senators Manchin and Romney for leading 8 of their colleagues to introduce another pragmatic proposal for creating a bipartisan fiscal commission. Over the past year, the federal government’s real annual budget deficit more than doubled, from $933 billion to $2 trillion, despite our economy experiencing the lowest sustained period of unemployment since the 1950s. Boom times such as these are when we should be reducing our debt, not blowing it up.
“Creating a fiscal commission to tackle the problem now has bipartisan, bicameral support in Congress, as well as support from 90% of voters in both parties. Congressional leaders and the Biden administration should make the establishment of such a commission before the end of the year a top priority.”
The Fiscal Stability Act’s introduction builds on an effort that has picked up significant momentum in recent months. In September, a group of independent experts across the political spectrum — including Ritz — urged the creation of a bipartisan fiscal commission. Reps. Scott Peters and Bill Huizenga then introduced the Fiscal Commission Act of 2023, a bill similar to the Fiscal Stability Act which 198 House Republicans subsequently voted for as part of a government funding proposal. Upon being elected Speaker of the House, Mike Johnson listed the creation of a bipartisan debt commission as one of his top priorities.
This week, Ritz published a column in Wall Street Journal offering five reasons why Democratic leaders in Congress and the Biden administration should join the push, which recent polling shows 90% of Democratic voters already support:
• Deficits are undermining support for the Biden economy.
• Debt-service costs crowd out progressive priorities.
• Republicans must be challenged to accept tax increases.
• Social Security and Medicare face automatic cuts under current law.
• A financial fix would boost confidence in government.
PPI’s Center for Funding America’s Future works to promote a fiscally responsible public investment agenda that fosters robust and inclusive economic growth. It tackles issues of public finance in the United States and offers innovative proposals to strengthen public investments in the foundation of our economy, modernize health and retirement programs to reflect an aging society, and transform our tax code to reward work over wealth.
The Progressive Policy Institute (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. Learn more about PPI by visiting progressivepolicy.org.
Since 2019, employment in the EU App Economy has risen by 53%, to 2.9 million. That’s according to the latest estimate from the Progressive Policy Institute, presented in this paper. By comparison, U.S. App Economy employment was 2.6 million in 2022, a gain of 14% from 2019.
What accounts for this rapid increase in EU App Economy jobs? And to what extent is the App Economy creating new opportunities for women and other nontraditional groups to enter tech sector employment? Because of the lack of bias in the app store approval process, app development has become a key route by which women and young people across Europe can develop tech skills and become an integral part of the digital economy.
We note that none of these App Economy jobs existed 15 years ago, when Apple first opened the App Store on July 10, 2008, in the middle of the global financial crisis. Android Market (which later became Google Play) was announced by Google shortly after. These app stores created a new route through which software developers could write programs for smartphones. These mobile applications — called “apps” — could then be distributed to the rapidly growing number of smartphone users around the world.
The jobs generated by the app stores became an important part of the recovery from the financial crisis of 2008-2009 and the subsequent economic expansion. When the pandemic hit, the need to conduct life remotely supercharged the use of apps, and resulted in many new App Economy jobs in Europe.
This report describes some important aspects of the EU App Economy. We also examine app-related skills development, compare the female share of information and communications technology professionals in both the EU and the U.S., and give some examples of new opportunities in the App Economy.
FACT: Military spending was 2.3% of world GDP last year.
THE NUMBERS: World exports, 2022*-
All goods $24,000 billion
Clothes $315 billion
Fish $151 billion
Arms transfers $32 billion
*Sources: WTO for all goods and apparel; UN Food and Agricultural Organization for fish; Stockholm International Peace Research Institute (SIPRI) for arms sales. SIPRI data covers known transfers of “major conventional weapons.”
WHAT THEY MEAN:
What place does the military hold in the world economy? Statistical snapshots from 2022 on world military spending and arms trade, and then three cautions about the data:
World defense spending at modern-history lows: A widely-used calculation by the Stockholm International Peace Research Institute (SIPRI) finds world military spending — procurement, pay, military construction, and so on — at about $2.24 trillion in 2022. According to the International Monetary Fund, world GDP was $100.15 trillion that year. So SIPRI’s figure suggests that about 2.2% of world income went to military budgets, and a World Bank table for the same year yields a very close 2.3% of world GDP.
This figure captures the policies governments set down in 2021, just before the Russian invasion of Ukraine, and by historical standards, it is very low. Tallies from earlier decades report military spending rates above 6% of world GDP in the 1960s; in a range from 3.8% to 4.5% in the 1970s and 1980s; and varying since 2000 in a narrow band between 2.2% and 2.6%. As two points of comparison: (a) about 11% of world GDP goes to health (or 6% of world GDP if one counts only public spending), and 4.2% to education; and (b) in labor terms, the CIA’s World Factbook estimates that about 20 million men and women are in uniform around the world which would be 0.5% of the world’s 3.5 billion workers. To look more specifically at the U.S., American military spending was about 3.5% of GDP in 2022 (by the World Bank’s table), which is above the worldwide average but far below the 11% the U.S. Defense Department reports for the Korean War years in the early 1950s and the 5% levels of the later Cold War.
Arms trade small relative to civilian trade: SIPRI’s parallel “arms transfer” count reports about $32 billion worth of arms deliveries in 2022. Their count covers deliveries of “major conventional weapons” — tanks, planes, missiles, submarines, artillery, etc. — and includes sales of both new and used kits, licensed production, and deliveries of significant components as well as complete systems. Like the world’s combined military budget as a share of GDP, the arms transfer total is a lot of money but small when measured against civilian trade. The WTO’s most recent annual trade statistics report puts “goods trade” in general at $24 trillion in 2022, which would make SIPRI’s $32 billion in arms transfers about 0.1% of the total. Or, to look at particular products, the WTO’s places clothing exports at $313 billion — ten times SIPRI’s arms transfer figure — and automotive trade at a much larger $1.37 trillion, while the U.N. Food and Agricultural Organization’s estimate of fish and seafood exports was $151 billion.
Nor does military trade look very large for individual countries. By country, SIPRI’s top exporters in 2022 were the U.S. at $14.5 billion, France at $3.0 billion, Russia at $2.8 billion, and China at $2.0 billion. This would be about 1% of the U.S.’ $2.1 trillion in goods exports, 0.5% of French and Russian exports (though a higher 3% of Russian manufacturing trade), and 0.1% of Chinese exports. On the import side, military shares of trade can be quite high for the largest purchasers — Qatar, the largest buyer on the SIPRI list, spent $3.3 billion on weapons or 15% of its overall $28 billion in imports, and military goods accounted for 2% and 7% of imports for fourth place Saudi Arabia and fifth place Kuwait — but outside the Persian Gulf is rarely a very large part of national import bills.
Tentative Conclusion: The public data and estimates, then, suggest that as of 2022 the world’s military economy was a relatively small part of the larger global economy; military spending a modest though not tiny part of national budgets; and military trade a very small part of international trade. Three cautions, though:
Caution (1): Secrecy: In many countries, some sections of national defense budgets and arms sales aren’t thought suitable for publishing, and are thus missing from the totals. So figures for military spending and trade, strictly defined, are reasonable “lowest-case estimates” rather than very firm data.
Caution (2): Definitions: The military economy is not separate from the civilian economy, but merges with it along the edges. Definitions of what is “military” and what is “civilian” are thus a bit arbitrary. In military trade, for example, is the right approach SIPRI’s decision to count weapons only? Would it be better to add “dual-capable” trucks, chips, fuel, rifles, and satellites too? Repair, training, software updates, replacement parts, and maintenance? Or should everything a military service buys be considered “arms trade”?
As an important example, the U.S. Defense Department’s 2023 policy paper observes that for both of these reasons, China’s “actual military-related spending could be 1.1 to 2 times higher than stated in its official [$209 billion] budget.” This would suggest a figure approaching $400 billion and somewhere between 2% and 3.2% of Chinese GDP, in contrast to the World Bank table’s 1.6%. (And some private estimates go higher.) Or to choose a case close to home, the State Department’s Political-Military Affairs branch, which oversees official U.S. arms sales policy, uses a broader definition than SIPRI’s to report “new sales” of U.S. weapons at about $55 billion a year, which would imply considerably higher global as well as American arms sales.
Caution (3): Changing times: The defense budgets and arms transfers of 2022 are those decided upon in 2021, just before Russia’s attack on Ukraine. Whatever the definitions one chooses, and however much they publish, governments are making this year’s budgets and sales in a world grown more dangerous, and their numbers will presumably be larger.
Secretary of Defense Lloyd Austin, presenting an $842 billion request for next year’s defense budget to the Armed Services Committees, notes (a) a “pacing challenge” from rising military spending and capability in China; (b) an “acute threat” to Europe and global security posed by Russia’s invasion of Ukraine; and (c) structural programs including pay raises for enlisted personnel, research and development, and more.
The Commerce Department’s Bureau of Industry and Security oversees export controls.
And the State Department’s Arms Sales and Defense page.
Spending:
A World Bank table of military spending/GDP makes Latin America and the Pacific Islands the regions with the least ambitious military budgets, at an average of 1.0% for each region. The Arab states’ spending level is highest at 5.0%. The sample below drops two outliers at the very top — Eritrea’s 20.5% of GDP as of 2003, and Libya’s 15.5% as of 2014 — along with embattled Ukraine’s 33.5%. (Also note, the Bank doesn’t venture a guess for North Korea.) Apart from these anomalies, military spending/GDP ratios around the world in 2022 topped out at Saudi Arabia’s 7.4% and Qatar’s 7.0%, and drift downward to the 0.2% levels for Laos, Mauritius, and Ireland, and Haiti’s lowest-in-the-world 0.1%. Here’s a sample list indicating the range.
Saudi Arabia
7.4%
Qatar
7.0%
Oman
5.2%
Israel
4.5%
Russia
4.1%
U.S.
3.5%
Cuba
2.9%
Singapore
2.8%
South Korea
2.7%
Pakistan
2.6%
Lithuania
2.5%
WORLD
2.3%
Vietnam
2.3%
United Kingdom
2.2%
France
1.9%
China*
1.6%
Norway
1.6%
Spain
1.5%
New Zealand
1.2%
Thailand
1.2%
Brazil
1.1%
Switzerland
0.8%
Indonesia
0.7%
South Africa
0.7%
Argentina
0.4%
Ireland
0.2%
Haiti
0.1%
* Official published Chinese budget. At the high end of DoD’s range, the Chinese military share of GDP share would be 3.2%, about the same as that of the United States.
And some perspectives on China’s military spending:
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.
Yesterday marked yet another election cycle in which voters rejected Republicans’ ongoing attempt to limit abortions and restrict reproductive care. Republicans continue to lose ground on this issue, even on their own red state turf. Every time abortion rights are put to a popular vote, they win and right-wing abolitionists lose.
The truth is that Americans are supporting abortion access at higher percentages than before the Supreme Court struck down Roe v. Wade. A 59% majority say they still oppose the justices’ decision. The results this cycle again confirmed broad public support for abortion access across the country and misgivings about the Supreme Court’s disruptive decision:
• Ohio voters came out in droves to enshrine abortion protections into their state constitution, preventing a dangerous six-week abortion ban (including no exceptions for rape or incest) from going back into effect after being blocked by the courts for over a year. The amendment to the state’s constitution got 56.6% of the vote.
• Virginia voters didn’t buy the Republicans messaging on a 15-week abortion ban as a “moderate” and “reasonable compromise” and voted to keep the Democratic majority in the Senate and flip the House, preventing Governor Youngkin from implementing the ban with a Republican majority. This also leaves Virginia as the southernmost state without a post-Roe change to abortion access.
• Despite the race not determining the majority in the Pennsylvania Supreme Court, voters showed strong support for the pro-choice Democrat, ensuring the Court will continue to protect reproductive access in the state.
• Finally, in deep-red Kentucky, voters also backed Democratic candidates for both Governor and Attorney General who promised to support abortion rights.
This all comes at the heels of last year, where ballot measures in six states, the most on record for a single year, resulted in wins for abortion rights, including in California, Kansas, Kentucky, Michigan, Montana, and Vermont. Next year, 11 more states could also face ballot measures related to abortion access, including in Arizona, Colorado, Florida, Iowa, Maryland, Missouri, Nebraska, Nevada, Pennsylvania, and South Dakota.
If the results of these races have been any indication of what messaging voters resonate with and the issues that matter most to them, it’s abundantly clear that ensuring abortion access remains a top concern. Voters see right through the thin veil of the Republican abortion agenda and clearly see their attacks on Democracy and on reproductive rights: They will go to any length to interfere in their ability to decide how and when to plan for their families.
At a time when maternal and infant mortality is skyrocketing in mostly red states, and pregnant women are being forced to sit in hospital parking lots until they are sepsis to receive care because of draconian abortion restrictions in red states, Americans’ health fares far worse at the helm of Republican leadership. Voters continue to see and are experiencing the harmful effects of the latest abortion restrictions post-Roe and show up time and again to refute the radical, toxic Republican abortion and reproductive health agenda.
Last night’s results demonstrate again that the majority of American voters are with the Democrats on reproductive rights. The party should center the abortion issue in next year’s national elections as well as state legislative contests. Democrats have an opportunity to connect with independent and moderate Republican voters who don’t want to see their personal liberties stripped away.
After his election as House speaker, Mike Johnson said one of his top priorities was the creation of a bipartisan commission to tackle the national debt. It’s a good idea that nearly 70% of voters in both parties support. In September, Reps. Scott Peters (D., Calif.) and Bill Huizenga (R., Mich.) introduced the Fiscal Commission Act of 2023, and 198 House Republicans voted for it as part of a government funding bill. Here’s why Democratic congressional leaders and the Biden administration should join the push:
Deficits are undermining the Biden economy. In the past year, the real federal budget deficit more than doubled, from $933 billion to $2 trillion. Democrats rightly argued that spending borrowed money was a critical economic support during the Covid pandemic. But the unemployment rate the over past year has been consistently lower than any point since the 1950s.
Economists, even those on the far left who subscribe to “modern monetary theory,” agree that increasing deficits in a tight labor market fuels inflation. Voters’ frustrations with inflation and the interest-rate hikes implemented to bring it under control exceed their appreciation for low unemployment, fueling disapproval of President Biden’s economic record. Deficit reduction is more important than it has been at any other time in the 21st century.
Debt-service costs crowd out progressive priorities. Annual interest payments are already at their highest level as a percentage of gross domestic product since the 1990s. By 2028 the government is projected to spend more than $1 trillion on interest payments each year—more than it spends on Medicaid or national defense. Worse, the U.S. may be entering a vicious circle whereby higher deficits increase debt and fuel inflation, which the Federal Reserve must combat by raising interest rates, causing debt-service costs to balloon further.
This week, an updated complaint filed by the Federal Trade Commission has raised additional questions about the merits of the FTC’s case regarding alleged anticompetitive practices by Amazon in their online storefront.
As has previously been stated by PPI’s Director of Competition Policy, Diana Moss, the FTC has a heavy lift in defending the markets it defines in the complaint — especially the “online superstore” market. The unorthodox approach of defining a market around a company’s large market share will garner scrutiny, potentially casting a shadow on the claim that consumers have been harmed.
This concern is especially pertinent in the face of a distinct lack of public support for any remedy, should the FTC prevail, around breaking up services offered by Amazon. For example, polling by PPI finds that 70% of working-class Americans do not support the government’s interference with Prime delivery services. The same poll found that only 17% of those asked supported breaking up the service.
The updated complaint reinforces a misunderstanding of the way in which today’s users buy and sell on Amazon. In defining the consumer-facing relevant market as online superstores, the FTC essentially concludes that e-commerce platforms specializing in certain types of products are not good substitutes.
This assumes that consumers use Amazon as a one-stop shop for all types of goods sold on the Amazon platform, a claim that is unproven in the complaint. Moreover, it ignores basic questions around how consumers consider product pricing and quality. Instead, the FTC assumes that because a product is available on the Amazon Marketplace, it is the optimal choice for consumers.
Take, for example, the complaint’s assessment of how Amazon offers the “Prime” designation to third-party sellers. The Fulfillment By Amazon (FBA) program is the primary means for sellers to obtain a Prime label, but requires them to distribute through Amazon warehouses to ensure that the standards of shipping are consistent with Amazon’s branding.
Under the FBA system, consumers benefit from knowing the speed and quality of service they can expect upon making a purchase. The other option for sellers to be included in the benefits of Prime labeling is Seller Fulfilled Prime (SFP), which closed enrollment in 2018 but may be reopening this year. SFP provides an alternative to Amazon’s FBA service, allowing third-party sellers to be eligible for the Prime designation on their listing without giving their inventory to Amazon warehouses.
However, Seller Fulfilled Prime became an issue of quality for Amazon’s customers, who were receiving packages far outside the two-day shipping window which is generally expected with Prime services. Amazon has previously stated that “fewer than 16% of SFP orders in the U.S. met the Prime Two-Day delivery promise customers expect,” meaning that in many cases the program was not beneficial to consumers who had to wait longer to receive orders despite the indication that the purchase was eligible for Prime delivery. When fulfilled through the FBA program, Prime delivery indicates that purchases will be shipped within two days.
The FTC attempts to equate the two programs, arguing that the discontinuation of enrollment served as a tool for Amazon to limit competition with third parties. Citing in the complaint that sellers enrolled in SFP met their promised “delivery estimate” requirement more than 95% of the time in 2018, they argue that the service provided was thus consistent with sellers utilizing the FBA program. However, the “delivery estimate” is an indication of the reliability with which a seller ships products, rather than the speed. While SFP sellers may reliably ship products, they do so at a much slower speed than is expected through FBA, which reliably ships products quickly.
This important distinction highlights the fact that the Prime label comes with an expectation of quality, and by differentiating its offerings, Amazon consumers are less likely to encounter listings that misrepresent the products and services they are providing. With an estimated 2.3 million active sellers on the Amazon Marketplace, consumers benefit from assurances that the quality of their purchase will be as expected. Competition on “quality” is a well-known concept and an important non-price dimension of competition. As the FTC examines concentration in the digital economy, it is critical that antitrust considers all dimensions of competition and target behaviors that truly harm consumers.
By installing Rep. Mike Johnson (R-La.), an ardent 2020 election denier, as Speaker without a single dissenting vote, House Republicans have erased any doubts about where their true loyalties lie.
Forget about “America First.” House Republicans have put Donald Trump first, abjectly surrendering to his seditious campaign to undermine Americans’ confidence in their democratic institutions.
That’s sparked the retirement of Rep. Ken Buck (R-Colo.), who warned his colleagues that Trump’s lies and lawlessness will lead Republicans to defeat again in next year’s presidential contest.
Unlike members of the Freedom Caucus, the new Speaker ostensibly is a nice guy. A change in tone is welcome, but it won’t mean much so long as GOP leaders remain mesmerized by Trump, either because they adore him or are terrified that he’ll urge his followers to turn them out of office.
