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8 Things That Must Happen Now to Salvage the Economy -- and the Country

The U.S. is no longer merely in crisis; it is in a state of emergency. And it will take more than re-regulating Wall Street to fix it.

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In addition, it can enable America to redress the gross neglect of its public assets. High on the list, alongside infrastructure and energy, should be universal pre-K schooling, more subsidies for college and the rethinking of the healthcare system. Investment here can also create jobs traditionally held by women, who are neglected by policy initiatives. Health will rapidly become the largest budget issue of the nation in coming years unless it is addressed. I favor "Medicare for all," the highly efficient and well-liked insurance program for the nation's elderly. It can be implemented in a practical amount of time, it can be integrated with the private healthcare system and it enables government to negotiate fees and drug costs if it so chooses.

Higher budget deficits can be tolerated if the money is used for such public investment. But in Obama's third year, it may be time to raise taxes on all but poorer workers to pay for the half-trillion dollars or more of social spending we badly need. By then, the hope, by no means a fantasy, is that Obama may have proven to Americans that government can work. That, of course, is the key to success. To do so, however, will require shedding some of the ideological baggage of the Rubinomics holdovers he has advising him.

Jeff Madrick is director of policy research, Schwartz Center for Economic Policy Analysis, The New School, and editor of the long-standing economics magazine, Challenge.