Subject: Debt limit deal, cost of an iPhone, and the Dalai Lama visits AEI If you have trouble reading this message, click here to view it as a web page.
Economic benefits of a “clean” debt limit deal.
Aparna Mathur : “Evidence suggests that the costs of protracted negotiations and the shutdown, as well as the economic uncertainty surrounding these talks are extremely high, and likely outweigh any benefits that might come out of such deals. Because of these costs, and even though long-term solutions are certainly warranted to reduce spending and debt levels, the debt ceiling hike should not be used as a threat point to force policy reforms.”
A shrinking labor force
Why Obamacare is bad for growth.
Stan Veuger: “The president and his acolytes in media and academia [have] pivoted to leisure. Why? The CBO now projects that the Affordable Care Act will reduce employment by the equivalent of 2.5 million jobs over the next decade. In an economy that over the past few years has seen millions of jobs disappearing, and millions of workers leave the labor force, that is economically harmful and politically poisonous news, requiring the development of new spin.”
Challenges facing Yellen
Financial regulation and low-income Americans.
Abby McCloskey: “Since the passage of the Dodd-Frank Act and other related financial reforms such as the CARD Act, prices of basic financial products and services have increased, consumer choice has been restricted, and millions of low-income consumers have been priced out of the market or forced to turn to alternative financial products. There may be several reasons for these trends, but the cost of regulation appears to be a significant factor.”
The Fed ignores emerging markets at its peril.
Desmond Lachman: “At a time of increased emerging market turbulence, the Fed seems to be blithely oblivious to the risks that those developments might pose to the U.S. economy. Indeed, in last week’s FOMC policy statement, there was not as much as a mention of the emerging market currency crisis. There was no mention despite the many reasons to believe that troubles in the increasingly important emerging market economies could have a significant bearing on the U.S. economy.”
The trouble with myRA retirement accounts is the Fed.
Alex Pollock: “The small retirement savings accounts or ‘MyRAs’ announced in President Obama’s State of the Union address are a tax-advantaged variation on the old, established theme of using government debt for small long-term individual savings: think of venerable US Savings Bonds. Leaving aside the political question of autocratic executive behavior, the big financial problem with this idea is that, under current conditions, they offer a zero to negative real interest rate to the people trying to save— they won’t be making any progress at all, or indeed losing ground, when inflation is taken into account.”
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