Thursday, June 24, 2010

Congress, Fed face classic choices on economy: is it the old "workers v. investors" problem?

The progressive to liberal press is maintaining that, with all the deficit and debt problems, governments, especially our own Congress and Federal Reserve, are being too stingy with ordinary people. Yes, Londoners were greeted with “Tax and Axe” headlines yesterday, but David Leonhardt also provided a big op-ed in the New York Times Business section, “When caution carries risk”, link here.

The Fed, the liberals say, has the power to lift the economy, in a climate of zero inflation. But the Fed also fears stirring up new instability.

No one wants to say it, but an underlying problem is demographic: the population is getting older, and only sometimes healthier (the latter is what matters to employers), and quasi-entitlements can’t keep people alive or even spiritually fed forever.

The Washington Post has an editorial this morning, “Time for tough economic choices” along the same lines, again hitting the holdup on extending unemployment benefits, here. The Post writes “More than 40 percent of the unemployed have been without work for six months. More alarming, nearly one-fourth have been jobless for a year.” More than 2 million unemployed will lose benefits on July 10 if the Senate does not act.

Visitors might also want to peruse the Pew Fiscal Analysis Initiative, here.

No comments: