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Big themes for the State of the Union

Next steps for the war on poverty. Aparna Mathur: The bulk of the evidence suggests that programs that enable people to work or transition to work are more effective at fighting poverty, than simple cash assistance programs. As such, wage-subsidy programs that combine skills training, and tax credit programs like the EITC are a better bet today to get the unemployed back in the labor market and improve the lives of low-income individuals. Income inequality from the AEI archives Kevin Hassett and Aparna Mathur (2012): The consumption gap across income groups has remained remarkably stable over time. Jonah Goldberg (2014): Liberals tend to see income inequality as the disease, and conservatives tend to see it as a symptom. James Pethokoukis (2013): Its interesting to note all the economic problems that Obama apparently views as less important challenges than income inequality. Aparna Mathur, Sita Slavov, and Michael Strain (2012): W hat is the socially optimal top marginal income tax rate? Minimum wage from the AEI archives: Kevin Hassett and Michael Strain (2013): The case against raising the minimum wage is straightforward: A higher wage makes it more expensive for firms to hire workers. Michael Strain (2013): No one argues that raising the minimum wage will increase employment. And today, shouldnt that be the point? Abby McCloskey (2014): Even if the minimum wage works as its advocates claim, it is a highly ineffective anti-poverty tool.

Future of economic growth

What your morning commute means for the economy. Kevin Hassett: Congestion in the U.S. today is a larger drag on growth than almost anything else, and better traffic and planning policies in many urban areas could go a long way to improving the economy. . . . In 2011, the total estimated cost of congestion in the U.S. topped $120 billion. The road to serfdom. James Pethokoukis: For the first time in the 20-year history of the annual Heritage FoundationWall Street Journal ranking of economic freedom, America hasnt a place among the top ten nations. A continuous, nearly decade-long slide leaves the U.S. economy at number twelve, just ahead of Bahrain and right behind Estonia. Blame large losses in property rights, freedom from corruption, and control of government spending for the steady erosion of Americas free -enterprise system. Chinas economic outlook dims. Derek Scissors: The oft-used line that the economy is slowing but still boasts the world's fastest rate of growth is inaccurate and misleading. What matters most is that available data indicate debt accumulation will induce economic stagnation.

Whats worse?
A carbon tax or a vacuum ban? Sita Slavov: Intended largely to reduce carbon emissions, the vacuum cleaner ban joins numerous other regulations throughout the world that severely restrict consumers' choices. Want an incandescent light bulb? Too bad they're banned. How about a gas guzzling car? Sorry they're being squeezed out by tighter fuel economy standards. Traffic jams, Benghazi, and IRS targeting. Stan Veuger: The New York Times is a very serious newspaper for very serious people that editorializes about very serious matters of state. How has it dealt with the three scenarios discussed when they became a part of the empirical reality surrounding us?

In other news
Download the free AEI book of the week! Better Parties: Better Government, by Peter Wallison and Joel Gora Six steps to housing reform. Alex Pollock: We urgently need something done in the mean time to control Fannie and Freddie, now operating as a government monopoly, heavily subsidized by the Federal Reserve, and given passes on onerous regulation burdening everybody else, while they get ready to repeat their past egregious mistakes.

Mark your calendar

1.28 State of the Union Address 1.29 FOMC meeting announcement 1.30 Jobless claims released 1.30 GDP figures released for Q4 2013 and 2013 annual 1.29 AEI Event: Corporate tax reform: Where to from here?

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Get up-to-the-minute updates on Twitter @AEIecon. Read more from the American Enterprise Institute economic policy team at www.aei.org/economics. Contact Abby at abby.mccloskey@aei.org if you have questions for the economics team. Sign up for a weekly copy of the LEDGER here. If you were forwarded this message, click here to subscribe to AEI newsletters. Click here to unsubscribe or manage your subscriptions. American Enterprise Institute for Public Policy Research | 1150 Seventeenth Street, NW, Washington, DC 20036 | 202.862.5800 | www.aei.org