Baum's View on Money
Good morning, all. Here are some stories on the U.S. economy that I'm reading to start my day.
Federal Reserve to markets: We'll get back to you on tapering.
In a nutshell, that's what the minutes from the Fed's July 30-31 meeting revealed. Almost all members of the policy committee were on board with the idea of starting to taper monthly asset purchases later this year. Almost all of them thought July was too soon. That was a month ago. What's changed since then? The minutes shed no new light on when the Fed will act. Whatever you thought about the timing of tapering before the minutes were released is exactly what you will think after reading them.
Big news from a big employer.
UPS, one of the biggest employers in the U.S., said it plans to drop health-care coverage for 15,000 working spouses. "Since the Affordable Care Act requires employers to provide affordable coverage, we believe your spouse should be covered by their own employer -- just as UPS has a responsibility to offer coverage to you, our employee," UPS said in a memo to employees. "Limiting plan eligibility is one way to manage ongoing health care costs." Rationing care is another.
The young and the restless.
U.S. median income has been rising since it hit a trough in August 2011, but remains below its level at the end of the recession in June 2009, according to a new study based on Census Department data. The boomers (ages 55-64) and those under 25 suffered the biggest hits to income. Those in the 65-74 year old age bracket were the only demographic to see real incomes rise by a statistically significant amount. Age does have its advantages, sometimes.
"It’s as if someone were out there making up pointless jobs just for the sake of keeping us all working," writes British anthropologist David Graeber, referring to "administrative sector" jobs. Corporate downsizing seems to have inflated the number of meaningless jobs, including paper-pushers to support a host of new services industries. John Maynard Keynes' 1930 prediction that technology would usher in the 15-hour workweek by the end of the last century hasn't panned out. Nor have some of his other general theories.
The debt time bomb, Part 119.
Just in case you've been reading too much Paul "What-Me-Worry" Krugman, David Walker, who was comptroller general of the Government Accountability Office for a decade, warns us against a false sense of security. The debt clock is ticking. We're all living longer. The ratio of workers to retirees is going in the wrong direction. The unfunded promises to future Social Security recipients are on the order of $73 trillion. And interest on the debt? You may have noticed that the Treasury can no longer borrow for 10 years at sub-2 percent. Under current law, the annual interest on the debt will top $800 billion in a decade, almost four times the current cost, according to the Congressional Budget Office. Yes, we should worry.
(Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)