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Saturday, January 29, 2022

Why we had to reconsider jobs, inflation and politics this week

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An uncertain postponement of the Democrats’ massive project to fix everything to improve the social safety net and the sudden rise in Covid-19-related lockdowns.

The week ends much differently than it started.

Great retirement. One of the more intriguing and unexplained questions in pandemic economics has been why millions of Americans are not returning to the workforce.

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Anyone who might want to give up work clicked right away.

But this is a story that refutes the myth that too much government aid has driven fat, happy young men into a leisurely life.

Moreau and Tap wrote:

People have left the workforce for myriad reasons in the past two years — layoffs, health insecurity, childcare needs, and any number of personal issues that have arisen from the disruption caused by the pandemic. But among those who have left and can’t – or don’t want to – come back, the vast majority are older Americans who have accelerated their retirement.

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Well, boomers. Morrow and Tabb cite economist Aaron Sojourner, who said there were 3.6 million more people who left the workforce and were not looking to return in November 2021 compared to November 2020 — and 90% were Americans in the 55 and over category.

Over the entire pandemic, nearly 70% of people who have left the workforce are older than 55, according to Goldman Sachs.

Many Americans who quit their jobs are young adults who move from one job to another with better pay — suggesting it’s not a problem of underemployment and more. Companies have not come to terms with the need to pay their workers more salaries.

Evidence of indignation. A new CNN poll from the SSRS this week suggests Americans are feeling anxious about the economy. CNN’s Jennifer Agesta writes that three-quarters of Americans are concerned about the state of the economy in their communities.

It is the price of things. When people were asked to rate the severity of seven issues affecting the economy recently, they chose the following as the main problems. High price theme.

  • The high cost of food and other everyday things (80%).
  • Disruption in the country’s supply chain (79%).
  • The high cost of housing (77%).
  • High cost of gas (70%).
  • Underemployment (67%).
  • Government spending (67%).
  • Coronavirus pandemic (65%).
An overview of the Federal Reserve on inflation. The Federal Reserve has switched sides entirely. It had previously considered the price increases to be “temporary” but this week changed its forecast and now expects to end its pandemic response programs earlier than expected – and has also hinted at multiple rate hikes to combat inflation.

“I think it is part of The reason we act today is to position ourselves During a press conference in Washington on Wednesday, Jerome Powell, chairman of the Federal Reserve Board of Governors, said he was “in a position” to deal with inflation.

The Fed had already advanced on inflation in November. Its further development this month is evidence that inflation continues to surprise some economists.

Misreading inflation for months. CNN’s Matt Egan writes that the Fed must strike a balance between fighting inflation and avoiding starting a recession.
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Egan says in his story, which also contains an interesting section on what exactly the Federal Reserve can do to fight inflation.

Spoiler alert: It’s raising interest rates.

But we don’t know what the future holds for the economy or with the pandemic that has completely affected it. College kids being sent home from campus and the Covid-19 outbreak in professional sports leagues is proof that forecasting is a flawed area of ​​business.

In the meantime, there’s what’s going on — or not happening — on Capitol Hill.

The future of “Building Back Better” is uncertain. There is a struggle among Democrats about what they should do to help Americans and the planet. What they can achieve will have major ramifications for the way Americans live their lives.

The plan has always been to pass the law this year.

But, since he couldn’t get the final approval from Senators Joe Manchin of West Virginia and Kirsten Sinema of Arizona, the plans will now likely remain on the ice until the new year.

One major complication is that there are now two cost estimates for the proposal. One assumes that some of the programs in the bill will expire in a few years. Another, which nearly doubles the cost to $3 trillion, assumes the programs will continue indefinitely.

While it’s true that most Democrats want to keep plans in place, it’s also true that these kinds of budget games were once used to pass tax cuts by Republicans.

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Parents, for now, will see less money next year. The bottom line is that Manchin has a price in his head — $1.75 trillion — and it would be very difficult for Democrats to fit their wish list under that line.

It also means that most parents, who receive monthly checks from the government, will see those checks cut next month since a temporary program Democrats had hoped to expand — enhanced tax credits for families with The children, who were first enacted under the Coronavirus Relief Act – will expire until they can find a way to get them to work again.

Ending the enhanced credit is a good thing by Manchin, who reportedly wants to “get rid of it,” at least off that bill. But it is the latest in a long list of pain Democrats have dealt with. This enhanced credit — which pays up to $3,600 per child (many of the payments are lower) — is a cornerstone of their efforts to reduce child poverty.

There are still other issues around the “Build Back Better” bill between the Mansion and the White House. That means Democrats’ efforts to combat climate change, ensure pre-kindergarten is universal and tackle the weekend in a much different place than intended.

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