In 2013, a graduate student discovered a flaw in a spreadsheet, renewing the debate about austerity and debt. Emerging economies tanked, and Bitcoin boomed. In the U.S., unemployment fell and the Federal Reserve started to scale back its bond-buying program. Research focused on inequality and jobs gap between the highly skilled and everyone else. The Affordable Care Act began.
Financial markets have become increasingly dependent on the Federal Reserve. The Fed is dependent on data (just in case you didn’t know). The data for the next few months will be distorted by the federal government shutdown during the first half of October. So what’s a responsible policy maker or investor to do to get a handle on how the U.S. economy is faring?
Erskine Bowles and Alan Simpson, the deficit-reduction duo, are trying to rekindle congressional interest in a $2.5 trillion package of spending cuts and tax increases with new details showing how it could work.
Cleaning up after the housing bubble burst seven years ago turned out to be a lot harder than the Federal Reserve imagined. And for a while, it seemed as if the cost of risk-taking run amok was enough to put the fear of God in central bankers.
Inflation is sometimes referred to as a hidden tax. Unlike other taxes, it doesn’t require legislation by Congress or the states. It doesn’t merit a line item on the 1040 federal income-tax form many Americans will file this week. And it doesn’t appear on the bottom of sales’ receipts as a percentage markup on the things we buy.