What I'm reading: U.S. has a skills problem

By Fareed Zakaria

The average literacy score for Americans ages 16 to 65 in a new OECD study “places the U.S. 18th out of 22 participating countries. In numeracy, the U.S. ranks 20th out of 22. In ‘problem-solving in technology-rich environments’ – a measure of the capacity to interact productively with computers – the U.S. comes in 14th out of 19,” writes Clive Crook on Bloomberg.

“Those results are actually quite good when compared with the performance of adults ages 16 to 24. In literacy, young Americans rank 20th out of 22; in numeracy, 22nd out of 22; and in problem-solving, 19th out of 19.”

“The only glimmer of good news in these figures, if you can call it good news, is that U.S. standards of literacy, numeracy and problem-solving aren’t falling in absolute terms as fast as the poor relative performance of U.S. youngsters might suggest. Young Americans have slid to the bottom of the rankings mainly because young adults in other countries are doing much better than their predecessors did, whereas their American counterparts aren’t. The fact remains, the capacities of the U.S. labor force are consistently well below average, and those of the youngest segment rank (on two out of three measures) dead last.”

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“Billionaire Warren Buffett says fighting over the debt ceiling ‘ought to be banned as a weapon’ like ‘nuclear bombs, too horrible to use,” writes Fortune magazine.

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“Analysts tend to discount OPEC’s role in the modern energy market, deriding it as a dysfunctional and irrelevant group that long ago lost its sway in setting oil prices. Watching OPEC’s conduct on a week-by-week basis, especially the internal disputes among its members, that conclusion seems plausible,” argue Gal Luft and Anne Korin in Foreign Affairs. “But looking at the cartel’s overall performance since 1973, one can appreciate the precision of Akins’ observation that for OPEC, oil in the ground is as good as oil in the bank. In the past 40 years, the world’s population has grown from four billion to seven billion, the number of vehicles in the world has quadrupled, and the Chinese economy has risen from its slumber. All these trends have caused global oil demand to spike from 55 million barrels a day in 1973 to 88 million barrels a day today.”

“Although the United States and other non-OPEC producers have been increasing their production, OPEC, which holds some three-quarters of the world’s conventional oil reserves and has the lowest per-barrel production costs in the world, produces today the exact amount of oil it did four decades ago: 30 million barrels a day, accounting for about a third of global supply. In other words, OPEC deliberately produces much less oil than its reported reserves would allow in order to keep prices higher than they would otherwise be.”

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“During the Reagan presidency spending averaged more than 22 percent of GDP, peaking at 23.5 percent in 1985. This year it is projected to be 21.6 percent of GDP. The latest CBO projections show spending rising back to Reagan era levels towards the end of the 10-year budget window,” writes Dean Baker in The Guardian.

“Over a longer term, spending is projected to rise further due to projections of rising health care costs and a growing interest burden, which is the result of a growing debt. The deficit fear mongers like to hype these projections of large deficits decades in the future to advance their agenda of cutting Social Security and Medicare.

“The reality is that the story of exploding interest burdens is utter nonsense since there is zero precedent for the country ever allowing the debt to expand in this way.”