The United States has a massive infrastructure deficit, with independent analysts finding that the country could need as much as $2 trillion in immediate investments just to bring its infrastructure up to date. With the economy recovering slowly and our nation’s roads and bridges crumbling, a new paper from the San Francisco Federal Reserve found that making investments into infrastructure has substantial short- and medium-term benefits for the economy.

Each dollar invested into infrastructure boosts state economies by at least two dollars, the paper found:

Federal highway grants to states appear to boost economic activity in the short and medium term. The short-term effects appear to be due largely to increases in aggregate demand. Medium-term effects apparently reflect the increased productive capacity brought by improved roads. Overall, each dollar of federal highway grants received by a state raises that state’s annual economic output by at least two dollars, a relatively large multiplier. [...]

In other words, for each dollar of federal highway grants received by a state, that state’s GSP rises by at least two dollars.

The initial impact of increased highway spending, the study finds, is due to an increase in aggregate demand. That is, it increases money held by workers who build the highway, who can then spend that money in other parts of the economy. The medium-term impact of infrastructure spending comes from increases in productivity and economic capacity offered by new infrastructure. During economic downturns, though, the effects are even larger. When the authors analyzed the 2009 American Recovery and Reinvestment Act (the stimulus), they found that the effects of infrastructure funds spent in 2009 and 2010 were roughly four times larger than normal.

After the success of his first stimulus, President Obama pushed for another investment into infrastructure in 2011. The American Jobs Act, independent analysts found, would have created as many as 2.6 million jobs and boosted the economy by as much as two percentage points, but Republicans blocked it. Instead, House Republicans chose to disinvest in the economy, pushing for $871 billion in cuts to investment spending — much of it in infrastructure — in their latest budget. But while the GOP has argued in favor of tax cuts for the wealthy to boost the economy, the San Francisco Fed paper proves that the “failed stimulus” they often decry actually provides major benefits to the economy, especially during downturns and slow recoveries.

A fire that killed 129 people in a Bangladeshi garment factory is raising questions about working conditions in the exporting hub. Sunday’s deadly fire immolated the Tazreen Factories plant just outside the major city of Dhaka, which appeared to have been making clothes for Western clothing giants like Walmart. The Dhaka plant had no emergency exits and utterly deficient emergency evacuation procedures:

When the fire alarm went off, workers were told by their bosses to go back to their sewing machines. An exit door was locked. And the fire extinguishers didn’t work and apparently were there just to impress inspectors and customers.

Though the safety risk posed by Tazreen’s substandard equipments was understood well before Sunday’s blaze, the same conditions appear to be relatively common among Bangladeshi factories. Since 2006, over 200 garment-factory workers have died in workplace fires. After another garment-factory lit up on Monday, the Guardian reported that “[w]orking conditions at Bangladeshi factories are notoriously poor, with little enforcement of safety laws, and overcrowding and locked fire doors are common.”

Fire safety is far from the only threat facing Bangladeshi garment workers. Bangladesh’s minimum wage requires workers be paid at least $37 a day, but there are credible reports of factories are paying below even this pittance as well as (occasionally sexual) abuse of employees. Bangladesh only recently legalized unions, and the ones that do exist are not yet powerful enough to take on the garment industry.

Many of these workers are making clothes for American and other Western markets; clothing makes up 80 percent of Bangladeshi exports and American imports from Bangladesh are growing rapidly.

Median net worth in the United States reached its lowest point since 1969 in 2010, according to a new study by Professor Edward Wolff at New York University. Moreover, according to Wolff’s research, inequality skyrocketed as a consequence of the Great Recession, taking resources away from middle class, minority, and young families while the wealthy made significant gains.

Wolff’s study tracked changes in overall household wealth by race, class, and age from 1962 to 2012. He found that in the past 20 years, average wealth among wealthy families rose substantially whereas the middle class and poor lost out. Indeed, the average family in the bottom 40 percent of Americans had a substantially negative net worth as a consequence of indebtedness:

Over this period [1983 to 2010], the largest gains in relative terms were made by the wealthiest households. The top one percent saw their average wealth (in 2010 dollars) rise by almost seven million dollars or by 71 percent. The remaining part of the top quintile experienced increases from 52 to 101 percent and the fourth quintile by 21 percent, while the middle quintile lost 18 percent and the poorest 40 percent lost 270 percent! By 2010, the average wealth of the bottom 40 percent had fallen to -$10,600.

The most recent and most significant spike in wealth inequality over the course of the period Wolff studied, from 2007 to 2010, was in large part consequence of the collapse in home prices after the housing bubble collapsed. Middle class families often had invested substantially in their homes, taking on significant debt to do so. When home values collapsed, the debt-to-asset ratio for those families skyrocketed, while wealthy families with less debt were comparatively unaffected.

Home price collapse also explained why young, black, and Hispanic families each lost substantial wealth relative to older and whiter families. Such families tended to have more debt and much more, as a percentage of wealth, invested in houses. Hispanic families were the hardest hit — according to Wolff, “the mean net worth in 2010 dollars of Hispanics fell almost in half, and the ratio of this to the mean net worth of white households plummeted from 0.26 to 0.15.”

Wolff analyzes household wealth, rather than annual income, for six reasons, including the fact that “the availability of financial assets can provide liquidity to a family in times of economic stress, such as occasioned by unemployment, sickness, or family break-up.” However, studies of income inequality also support Wolff’s pessimistic account of growing inequality: they’ve found income inequality has risen in almost every state over the last 30 years and that the middle class has just suffered its “worst decade in modern history.” Unfortunately, many of the jobs created since the Recession don’t pay well enough to make up for the collapse.

Since voters rejected Mitt Romney’s $5 trillion tax plan and President Obama won re-election earlier this month, Republicans have expressed interest in raising revenue to avert the coming fiscal cliff. House Speaker John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA) immediately signaled that they are open to raising revenue and prominent Senators Lindsey Graham (R-SC), Saxby Chambliss (R-GA) and Bob Corker (R-TN) publicly broke with a conservative no-tax pledge, arguing that they would be willing to close loopholes and deductions so long as Democrats embrace spending cuts in Medicare and Social Security and support “structural reforms” in entitlement programs.

And while the GOP’s rhetorical shift represents a break from their dogged opposition to revenue increases during previous budget negotiations, their public “concessions” closely mirror the kind of policies voters overwhelmingly rejected: tax reform that does not increase marginal tax rates on the richest Americans, but includes eliminating tax loopholes and steep entitlement cuts that closely mirror the policies included in Rep. Paul Ryan’s (R-WI) budget.

As Steve Benen put it, “on the one hand, Republicans would get the tax rates they want. On the other hand, Republicans would also get the entitlement changes they want.” Yet the party and the media are suddenly presenting the position as “big concession” and are urging Democrats to back entitlement reform:

– SEN. LINDSEY GRAHAM (R-SC): “I’m willing to generate revenue. It’s fair to ask my party to put revenue on the table…. I will not raise tax rates to do it. I will cap deductions….But to do this, I just don’t want to promise the spending cuts. I want entitlement reforms.” [This Week, 11/25/2012]

– CNBC’s JOHN HARWOOD: “But you saw yesterday on some of the Sunday shows people like Lindsey Graham making the argument that, ‘yes I’m willing to put tax revenue on the table, not rates but revenue.’ But that’s a big concession by Republicans because they have not been willing to do that before except revenue as it comes from growth.” [Squawk Box, 11/26/2012]

– SEN. BOB CORKER (R-TN): “This is a very easy thing to do technically. What it takes is political courage … I think I’ve shown a willingness to compromise and solve this problem.” [CBS This Morning, 11/26/2012]

– MSNBC’s MIKA BRZEZINSKI: “But there are new signs that lawmakers may be willing to compromise. A growing number of Republicans are slowly backing away from Grover Norquist anti-tax pledge saying they are open to letting revenues rise if Democrats do their part in the budget talks.” [Morning Joe, 11/26/2012]

– CNN’s SOLEDAD O’BRIEN: “Politicians on both sides of the aisle are now signaling that they’re willing to compromise. That includes Republicans who’ve been softening their stance on raising taxes.” [Starting Point, 11/26/2012]

In reality, the post-election deal resembles the package Boehner agreed to in 2011, though it was quashed by more conservative House Republicans. Now, the party is once again suggesting that new revenue should be part of a plan to avoid the fiscal cliff, but only if that revenue coincides with a lowering of tax rates. The pitch is very similar to the plan presented by Romney, which was supposed to boost growth while lowering taxes and making up the revenue from closing loopholes:

Fortunately, President Obama has rejected this kind of approach, saying during a press conference in November that, “What I will not do is to have a process that is vague, that says we’re going to sorta-kinda raise revenue through dynamic scoring or closing loopholes that have not been identified.”

The end-of-year package of tax increases and spending cuts brought about by last summer’s debt ceiling deal includes the expiration of multiple tax breaks that benefit the middle class, and allowing those provisions to expire would have damaging effects on consumer spending and the overall economy, according to a report from the White House’s Council of Economic Advisers (CEA) released this morning.

Failure to extend the middle class portion of the Bush tax cuts, along with the failure to patch the Alternative Minimum Tax (AMT), could reduce overall economic growth by 1.4 percentage points and reduce consumer spending by $200 billion in 2013, the report found:

Taking account of these multiple channels, the President’s Council of Economic Advisers (CEA) estimates that allowing middle-class tax rates to rise and failing to patch the AMT could cut the growth of real consumer spending by 1.7 percentage points in 2013. This sharp rise in middle-class taxes and the resulting decline in consumption could slow the growth of real GDP by 1.4 percentage points, which is similar to recently published estimates from the Congressional Budget Office.

To put these figures in perspective, faced with these tax hikes, the CEA estimates that consumers would likely spend nearly $200 billion less than they otherwise would have in 2013 because of higher taxes. This reduction of $200 billion is approximately four times larger than the total amount that 226 million shoppers spent on Black Friday weekend last year, or roughly the amount American families spent on all the new cars and trucks sold in the U.S. in the last year. As Figure 5 shows, this $200 billion reduction would likely be spread across all areas of consumer spending.

Reports from the nonpartisan Congressional Budget Office and Congressional Research Service have backed up findings that allowing the expiration of the tax cuts that benefit middle class families would have perilous effects for the nation’s economy. President Obama has proposed an extension of the Bush tax cuts for incomes below $250,000 while allowing for the expiration of lower rates on incomes above that threshold. Both the CBO and CRS found that the expiration of tax cuts above $250,000 would have little effect on economic growth.

The report also takes into account certain tax credits, such as the Child Tax Credit, that will expire at the end of the year. Senate Democrats attempted to extend the middle-income Bush tax cuts as well as those tax credits earlier this year, but Republicans blocked the bill and chose instead to support legislation that would raise taxes on 10 times as many Americans as the Democratic plan.

Warren Buffett, the famous investor who proposed the minimum tax on the wealthy that led to President Obama’s proposed “Buffett Rule,” renewed his call for such a tax in a Monday editorial in the New York Times.

Buffett supports the expiration of the high-income Bush tax cuts, though he would raise the threshold from $500,000 to $250,000. But more importantly, he wrote in the editorial, a minimum tax would mitigate many of the preferences the wealthy glean from today’s tax code, raising a significant amount of revenue to reduce the nation’s deficit and debt without hurting the incentive to invest:

Additionally, we need Congress, right now, to enact a minimum tax on high incomes. I would suggest 30 percent of taxable income between $1 million and $10 million, and 35 percent on amounts above that. A plain and simple rule like that will block the efforts of lobbyists, lawyers and contribution-hungry legislators to keep the ultrarich paying rates well below those incurred by people with income just a tiny fraction of ours. Only a minimum tax on very high incomes will prevent the stated tax rate from being eviscerated by these warriors for the wealthy.

Buffett’s minimum tax would reverse the trend of falling tax rates for the ultra-wealthy. The average effective tax rate for taxpayers with incomes over $10 million fell to 20.7 percent in 2010, according to Internal Revenue Service data released last week, largely due to the fact that income from investments, which are taxed at a lower rate, make up nearly half of their incomes. The capital gains rate has been steadily eroded over the last 30 years, driving up income inequality in the process. In 2010, 93 percent of income gains went to the top 1 percent.

Republicans blocked Democratic attempts to enact a Buffett Rule earlier this year, arguing that it would raise a small amount of revenue while hammering small businesses. Citizens for Tax Justice, however, found that the rule would have raised about $50 billion a year while affecting only the richest 0.08 percent of taxpayers. And conservatives haven’t always opposed such taxes: it was Ronald Reagan who equalized capital gains rates with wage income rates and famously made the case that millionaires shouldn’t pay lower tax rates than middle-class earners.

Sen. Bob Corker (R-TN) is out with a new plan he says could help the nation avert the fiscal cliff and raise over a trillion dollars in new revenue by capping deductions, implementing “a chained consumer price index,” partially privatizing Medicare and raising the retirement age.

During an appearance on CBS This Morning, Corker indicated that he is flexible on raising marginal tax rates and joined a growing number of Republicans who have publicly broken from Grover Norquist’s no-tax pledge:

CHARLIE ROSE (HOST): Are you prepared, as others are doing, to sort of say, ‘I’m going to forgo the pledge because it is outdated and the country’s problems are too big?’

CORKER: Well, I’m not obligated on the pledge. I made Tennesseans aware, I was just elected, that the only thing I’m honoring is the oath I take when I’m sworn in this January. [...]

NORAH O’DONNELL (HOST): Let me ask you. Would you be willing to also raise the capital gains rate?

CORKER: You know, I’m not — I’m not the negotiator sitting at the table. I’m open to solving this problem, and what I’ve done, Norah, in a 242-page bill is showboat the White House and Republican negotiators that this technically is very easy to do.

Watch it:

Over the weekend, Sens. Saxby Chambliss (R-GA), and Lindsey Graham (R-SC) both backed away from Norquist’s pledge — which rejects any tax increase — joining long-term opponent Rep. Peter King (R-NY).

Norquist appeared on CNN’s Starting Point Monday morning and denied that any Republicans had defected from his pledge. “No Republican has voted for a tax increase,” he said. “We’ve got some people discussing impure thoughts on national television.”