I would call this Numbers Mashing, though it has clean lines and details. I would suggest that the projected Growth of last year was the Inflation which the Fed stated did not exist. It is the Answer to rising Wages in the face of maintained Unemployment. I read in another article which I did not source link that Consumers made a further Dip into Savings of around 1.4% in the last year. There will not be a 4% increase in personal consumption expenditures if the diet of Savings consumption is used. Housing was down 5% last year, which I have always believed would stabilize around 2005 Price levels. Monetary policy may support the economic recovery, though I imagine it only supports adverse Past debt loads for lending institutions. I personally expect an economic growth rate of less than 3% for the coming year, with slightly worse for the following year; I fell that the American economy has reached its Peak, what with the start of Retirement for the Baby Boomers. I know that the Unemployment rate will only decrease with their Retirement. The Fed cannot have it both ways in the final analysis, and economic slack will not hold down Inflation; economic growth as stated must generate the Inflation. I think it will be a real bitch by mid-Summer.
I may have a radical Solution for the President to help the Job Market; by the way, I am scalping all these links from Mark Thoma. My Solution will seem like a really incredible Solution, until it is examined in minutia. I would call this the Forced Retirement Act. This would take the decision to Retire away from individual Labor, and place it in the hands of current Employers. Anyone over the Age of 55 could be forcibly Retired if their Employer wished to replace them with younger Labor. Social Security benefits would be calculated as if they were of Age 65, but on current Worked Quarters. I can just see the economists jumping Up and Down out of outrage.
The Pressures on the Social Security Fund would be immediately accelerated admittedly. There would be constant and raucous complaint coming from the forced Retirees. There would have to be allowance for forced Retirees to attempt employment elsewhere in the economy; and consistently, allowance for Anyone over Age 55 to retire voluntarily. The Upside would be that the already Worked Quarters would be at cheaper rate than Now or in the Future; with allowance made for current unemployment due to the Recession so that Retirees are not penalized. Vast numbers of Job positions would be opened up, and at downsized Wage levels. More People would eventually be paying into the Social Security Fund against a lower liability. Retirees would start on Retirement practices far earlier–leading to an increase in Consumption Spending without dependence on further erosion of Housing Prices; new Start-Ups of retirement homes could restart the Construction industry. It is a Win-Win in long-term fiscal budgeting, and a source We should consider. lgl