BA Spending Daily August 31, 2012

“The economy has stolen my retirement”
The Wall Street Journal reports, “The weak economy has been tough for small-business owners across the board, with their total revenue inching up by just 3% since 2007 and declining in fields such as construction (-12%), real-estate services (-3%) and retailing (-2%), according to financial-software maker Intuit Inc. But for entrepreneurs in their 60s and 70s, the consequences have been particularly vexing. Many of them are stuck in ‘business purgatory,’ unable to retire and forced to hang on for a recovery that economists say could still be a long way off. … Nearly half of the 799 small-business owners surveyed in August by The Wall Street Journal and Vistage International, an executive-mentoring organization, expect to retire after age 65, with 38% saying that their planned retirement date is later than they had predicted five years ago. In addition, 56% said most of their retirement nest egg is tied to their business.” One small business owner, Judy Lawton, 69, “hasn’t taken a vacation in years because she can’t afford to travel. ‘The economy has stolen my retirement,’ she says.”

Are We Going Over the Fiscal Cliff?
Real Clear Politics reports, “Republicans unveiled an unsettling new toy at their convention in the form of a continually updating ‘national debt clock.’ During three days of speechifying, the clock added $12 billion to the debt, which is now more than $15.9 trillion. … According to the Pew Research Center, 70 percent of Americans are alarmed by the debt, which rose roughly $200 billion a year during George W. Bush’s eight years in office and a trillion dollars a year in President Obama’s four. But what concerns economists more than the debt is the impending fiscal cliff, shorthand for the crisis that will face the U.S. government at the end of 2012. At that time, taxes will soar and government spending will plunge. … John Cogan, a public policy professor at Stanford and former deputy director of the Office of Management and Budget,  ”worries that ‘super hyper-partisanship’ in Washington will make it difficult to reach a post-election agreement. He compares falling off the fiscal cliff to an earthquake in California or a hurricane along the Gulf Coast. ‘The probability of these events isn’t high, but the consequences when they occur can be disastrous,’ he said.”

Economy’s Struggle May Prompt Fed Action
The Associated Press reports, “Few expect Chairman Ben Bernanke to signal at a Federal Reserve conference Friday in Jackson Hole, Wyo., that the Fed is about to take major new action to boost the economy. No one is sure, though. Three years after the end of the Great Recession, the U.S. economy is still struggling to break out of a slog that’s kept unemployment at a painfully high 8.3 percent. After its last policy meeting, the Fed repeated a pledge to try to boost growth if hiring remains weak. And minutes of that meeting showed that some Fed officials felt the economy would need more support ‘fairly soon’ unless it improved significantly.”

“Euro hits 8-week high versus dollar”
Reuters reports, “The euro rose to an eight-week high against the dollar on Friday before a speech by Federal Reserve Chairman Ben Bernanke which would push the U.S. currency lower if he signals more monetary easing may be imminent. Following comments by European Central Bank executive board member Benoit Coeure, the euro also benefited from anticipation that the bank will announce clear steps to tackle the euro zone debt crisis at its policy meeting next week. … Expectations Bernanke will signal another imminent round of asset buying, or quantitative easing, have ebbed recently following better U.S. economic data, allowing the dollar to recover. But some analysts said this has merely provided better levels to sell.”

Most New Jobs Added in Recovery Are Low Paying
The New York Times reports, “While a majority of jobs lost during the downturn were in the middle range of wages, a majority of those added during the recovery have been low paying, according to a new report from the National Employment Law Project. The disappearance of midwage, midskill jobs is part of a longer-term trend that some refer to as a hollowing out of the work force, though it has probably been accelerated by government layoffs. ‘The overarching message here is we don’t just have a jobs deficit; we have a ‘good jobs’ deficit,’ said Annette Bernhardt, the report’s author and a policy co-director at the National Employment Law Project, a liberal research and advocacy group.”

Romney Gives “Passing Reference” to Medicare in Speech
Politico reports, “Mitt Romney’s most significant political speech of the 2012 campaign made only a passing reference to two of the biggest issues in the entire election: Medicare and the future of President Barack Obama’s health care law. In the whole speech, which lasted about 45 minutes, there were exactly two lines about health care. One was the same attack on Obama’s Medicare cuts that Paul Ryan made last night. The other was the standard pledge to repeal ‘Obamacare.’ … On the night when he had the biggest national audience he’s had since the first days of the campaign, Romney didn’t talk about what he’d put in place of Obama’s health care law — even though it could have been a prime opportunity to win public support for the market-oriented, state-based reforms he says he wants.”

RNC Debt Clock Reaches $8.5 Billion
The Hill reports, “The final tally of American debt accumulated during the Republican convention: $8,539,526,393.07. … Republicans used the debt, totaling nearly $16 trillion, as one of their persistent themes at the convention and on the campaign trail to hammer on President Obama for his policies, which they say are leading to a crushing amount of public debt that could destabilize the nation.”