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Click to enlarge.
Let's zoom in for a closer look and slap a trend line on the recovery.
Click to enlarge.
Nice parabola.
Even as a permabear, I would not expect the growth to be stalling with the unemployment rate falling as it has. That said, it is what it is.
This parabolic trend will fail. That is a certainty. Which way (up or down) it fails shall remain a mystery for the time being.
In any event, we are a very long way from achieving the 4% nominal growth rates we've seen during the previous recoveries/expansions of the past 30 years, nail salon wage pressure notwithstanding.
Source Data:
St. Louis Fed: Custom Chart
4 comments:
Here's one way to cope with the demographic problem.
http://www.theguardian.com/money/2014/nov/07/isle-man-government-move-pension-age-74
dearieme,
I have longed believed that the Social Security retirement age should be tied to life expectancy if we want the system to remain solvent.
That's especially true if a fountain of youth is discovered. We can't all expect to work just 40 years or so if we all will live forever. As a side note, should I discover a fountain of youth I would definitely need to reenter the workforce. There's no way my nest egg can possible last forever.
Too bad Social Security wasn't tied to lifespan when it was first created. Perhaps they didn't think we'd be living longer? It was 1935. Things were certainly looking bleak. And then there was WW2. That definitely tended to reduce a few lifespans.
Life Expectancy for Social Security
As Table 1 indicates, the average life expectancy at age 65 (i.e., the number of years a person could be expected to receive unreduced Social Security retirement benefits) has increased a modest 5 years (on average) since 1940. So, for example, men attaining 65 in 1990 can expect to live for 15.3 years compared to 12.7 years for men attaining 65 back in 1940.
Seems to me that the retirement age could/should be pushed back "a modest 5 years". I say this as a person with a vested interest to see it not happen of course. I am 50 after all, but fair is fair.
They met you halfway, they upped the "full retirement" age to 67 back in the 1990'2.
BTW - if we are going to raise the retirement age to account for "what was back in 1940 - should we not also revert to the 1940's percentage of SS contribution of 2%?
Unknown,
Good points!
In order to meet our rising debt obligations there may be a point in the future when we will need to raise the contribution to 99%. I wonder what that will do to corporate profits though, lol. Sigh.
Gallows humor. :(
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