That should not be a surprise given the paper’s hostility to Social Security and its outrage over the fact that unionized auto workers can earn $56,000 a year, but the Post’s editorial calling for reform does miss an important part of Greece’s story. While aspects of Greece’s welfare state almost certainly do need to be changed (a retirement age of 60 is hard to support in a modern economy), it is also important to note that there is massive tax evasion in Greece, especially by the wealthy.
The OECD estimated the size of Greece’s underground economy at more than 30 percent of its official economy. Even if this is an overstatement, the existance of a large uncounted sector inidcates that Greece’s debt burden is considerably smaller relative to the size of its economy than the official data imply. It also points to the fact that many wealthy people are likely paying the taxes that they legally owe. Greece’s citizens are likely to be less amenable to giving up benefits like a relatively generous Social Security system in a context where the wealthy are avoiding their tax obligations. This is an important part of the story that needs to be mentioned in any discussion of Greece’s fiscal problems.
That should not be a surprise given the paper’s hostility to Social Security and its outrage over the fact that unionized auto workers can earn $56,000 a year, but the Post’s editorial calling for reform does miss an important part of Greece’s story. While aspects of Greece’s welfare state almost certainly do need to be changed (a retirement age of 60 is hard to support in a modern economy), it is also important to note that there is massive tax evasion in Greece, especially by the wealthy.
The OECD estimated the size of Greece’s underground economy at more than 30 percent of its official economy. Even if this is an overstatement, the existance of a large uncounted sector inidcates that Greece’s debt burden is considerably smaller relative to the size of its economy than the official data imply. It also points to the fact that many wealthy people are likely paying the taxes that they legally owe. Greece’s citizens are likely to be less amenable to giving up benefits like a relatively generous Social Security system in a context where the wealthy are avoiding their tax obligations. This is an important part of the story that needs to be mentioned in any discussion of Greece’s fiscal problems.
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University of Chicago economist Casey Mulligan makes the case that housing is now on the upswing. The part of the story that he seems to have missed is that after house prices rose last fall as a result of low mortgage interest rates, a hyperactive HUD, and the first time homebuyers tax credit, they have recently reversed course and are heading downward by most measures. We’ll look for Professor Mulligan’s account of the second housing slump in 6 months or so.
University of Chicago economist Casey Mulligan makes the case that housing is now on the upswing. The part of the story that he seems to have missed is that after house prices rose last fall as a result of low mortgage interest rates, a hyperactive HUD, and the first time homebuyers tax credit, they have recently reversed course and are heading downward by most measures. We’ll look for Professor Mulligan’s account of the second housing slump in 6 months or so.
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It would have been helpful to point this fact out in an article reporting on the Greek and eurozone financial crisis. While Greece did have serious fiscal problems prior to the economic crisis, the other countries now facing difficulties were not similarly troubled. Spain, the most important of the troubled countries, actually was running surpluses prior to the crisis. The difficulties now facing these countries is largely the result of the economic downturn, which has seriously worsened their fiscal situation.
The European Central Bank (ECB) could make the money available to these countries to sustain their economies through this downturn. (They would print it.) The ECB has opted not to go this route because of peculiar superstititions about inflation. It would be worth pointing out to readers that this crisis is largely the result of superstitions by Europe’s central bankers, not fundamental economic problems.
It would have been helpful to point this fact out in an article reporting on the Greek and eurozone financial crisis. While Greece did have serious fiscal problems prior to the economic crisis, the other countries now facing difficulties were not similarly troubled. Spain, the most important of the troubled countries, actually was running surpluses prior to the crisis. The difficulties now facing these countries is largely the result of the economic downturn, which has seriously worsened their fiscal situation.
The European Central Bank (ECB) could make the money available to these countries to sustain their economies through this downturn. (They would print it.) The ECB has opted not to go this route because of peculiar superstititions about inflation. It would be worth pointing out to readers that this crisis is largely the result of superstitions by Europe’s central bankers, not fundamental economic problems.
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NPR presented a segment on the impact of the new health care bill on farmer this morning. It told listeners that employers of more than 50 workers who do not provide insurance will be required to pay a “hefty” fee. It is not clear how NPR determined that the fee was “hefty.”
NPR presented a segment on the impact of the new health care bill on farmer this morning. It told listeners that employers of more than 50 workers who do not provide insurance will be required to pay a “hefty” fee. It is not clear how NPR determined that the fee was “hefty.”
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The Wall Street Journal told readers that: “the Congressional Budget Office said recently the social security trust fund will record a deficit in 2010, returning to the black briefly, before permanently going back into the red 2016.” This is not true. The Social Security trust fund is projected to show a surplus of close to $100 billion in 2010 and will remain in the black until after 2020.
The Journal likely forgot to include the interest on the bonds held by the trust fund. If the WSJ is talking about the trust fund, then this money must included. It is remarkable that the paper’s editors somehow missed this error.
The Wall Street Journal told readers that: “the Congressional Budget Office said recently the social security trust fund will record a deficit in 2010, returning to the black briefly, before permanently going back into the red 2016.” This is not true. The Social Security trust fund is projected to show a surplus of close to $100 billion in 2010 and will remain in the black until after 2020.
The Journal likely forgot to include the interest on the bonds held by the trust fund. If the WSJ is talking about the trust fund, then this money must included. It is remarkable that the paper’s editors somehow missed this error.
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The headline of the CNNMoney.com piece is that: “Economists: The stimulus didn’t help.” This is striking. The independent economists at the Congressional Budget Office certainly think it helped, adding more than 2 percentage points to GDP growth and lowering the unemployment rate by over a percentage point. Many prominent private economic forecasting firms, including Moodys.com, Global Insights, and Macroeconomic Advisors, also believe that it helped.
So, what’s the basis for this story? A survey of 68 members of the National Association of Business Economists (NABE) found that 73 percent thought that the stimulus had no impact on employment. This is not exactly a representative group of economists. NABE tend to be far more conservative than the economics profession as a whole. It is wrong for CNN to present their views as representative.
The headline of the CNNMoney.com piece is that: “Economists: The stimulus didn’t help.” This is striking. The independent economists at the Congressional Budget Office certainly think it helped, adding more than 2 percentage points to GDP growth and lowering the unemployment rate by over a percentage point. Many prominent private economic forecasting firms, including Moodys.com, Global Insights, and Macroeconomic Advisors, also believe that it helped.
So, what’s the basis for this story? A survey of 68 members of the National Association of Business Economists (NABE) found that 73 percent thought that the stimulus had no impact on employment. This is not exactly a representative group of economists. NABE tend to be far more conservative than the economics profession as a whole. It is wrong for CNN to present their views as representative.
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Oh yeah, the Post forgot to mention this part of the story. In an article that focuses on the debt burden facing an Italian city, the Post told readers: “analysts are also warning that national coffers could be further strained if heavily indebted countries are forced to spend precious resources to rescue local jurisdictions.”
This is a problem for the euro zone countries who do not have the option to simply print money to boost their economy in the downturn. Since the basic probelm facing the world economy right now is inadequate demand, there is little reason that large economies cannot boost demand by simply printing money. The European Central Bank could do this on behalf of its member countries. It has chosen not to, thereby subjecting millions of people to unnecessary suffering. It is remarkable that the Post chose not to mention this fact.
Oh yeah, the Post forgot to mention this part of the story. In an article that focuses on the debt burden facing an Italian city, the Post told readers: “analysts are also warning that national coffers could be further strained if heavily indebted countries are forced to spend precious resources to rescue local jurisdictions.”
This is a problem for the euro zone countries who do not have the option to simply print money to boost their economy in the downturn. Since the basic probelm facing the world economy right now is inadequate demand, there is little reason that large economies cannot boost demand by simply printing money. The European Central Bank could do this on behalf of its member countries. It has chosen not to, thereby subjecting millions of people to unnecessary suffering. It is remarkable that the Post chose not to mention this fact.
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The Post has a piece this morning on Delaware Senator Ted Kaufman and his proposal for breaking up the big banks. At one point it presents a quote from Larry Summers, the head of President Obama’s National Economic Council: “Most observers who study this believe that to try to break banks up into a lot of little pieces would hurt our ability to try to serve large companies, and hurt the competitiveness of the United States.”
It would have been worth pointing out to readers that Summers’ asssertion is not obviously true. Many prominent experts on banking, including two current regional Federal Reserve Bank presidents and Simon Johnson, the former chief economist at the IMF, have argued that the country does not need banks that are as large as the too big to fail institutions that would be broken up under Senator Kaufman’s amendment.
The Post has a piece this morning on Delaware Senator Ted Kaufman and his proposal for breaking up the big banks. At one point it presents a quote from Larry Summers, the head of President Obama’s National Economic Council: “Most observers who study this believe that to try to break banks up into a lot of little pieces would hurt our ability to try to serve large companies, and hurt the competitiveness of the United States.”
It would have been worth pointing out to readers that Summers’ asssertion is not obviously true. Many prominent experts on banking, including two current regional Federal Reserve Bank presidents and Simon Johnson, the former chief economist at the IMF, have argued that the country does not need banks that are as large as the too big to fail institutions that would be broken up under Senator Kaufman’s amendment.
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Federal Reserve Board Chairman Ben Bernanke, who famously missed the housing bubble and then insisted the problems in the housing market would be contained in the subprime sector, warned the country about the need to contain deficits in testimony before President Obama’s deficit commission today. It would have been helpful to readers if reporters had noted Mr. Bernanke’s track record so that they would be better able to assess the importance of his remarks.
Of course, his main statement: “History makes clear that failure to achieve fiscal sustainability will, over time, sap the nation’s economic vitality, reduce our living standards, and greatly increase the risk of economic and financial instability,” is trivially true. Obviously something that is not sustainable cannot, by definition, persist indefinitely.
However, Bernnake’s statement provides no basis for determining whether this is a need to act now, in 5 years, or in 20 years. It effectively says nothing. Reporters could have pointed this fact out to readers.
Federal Reserve Board Chairman Ben Bernanke, who famously missed the housing bubble and then insisted the problems in the housing market would be contained in the subprime sector, warned the country about the need to contain deficits in testimony before President Obama’s deficit commission today. It would have been helpful to readers if reporters had noted Mr. Bernanke’s track record so that they would be better able to assess the importance of his remarks.
Of course, his main statement: “History makes clear that failure to achieve fiscal sustainability will, over time, sap the nation’s economic vitality, reduce our living standards, and greatly increase the risk of economic and financial instability,” is trivially true. Obviously something that is not sustainable cannot, by definition, persist indefinitely.
However, Bernnake’s statement provides no basis for determining whether this is a need to act now, in 5 years, or in 20 years. It effectively says nothing. Reporters could have pointed this fact out to readers.
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The Washington Post (a.k.a. Fox on 15th Street) told readers that: “Official forecasts suggest that without sharp changes in federal spending or tax collections, the United States could enter into a downward spiral of indebtedness that by the end of this decade would erode the country’s ability to educate its children, care for the elderly or mount a robust national defense.”
Wow, that sounds really dire. It would have been great if they gave a source for this one because that is not what the standard sources say. For example, if we go to our most recent Budget and Economic Outlook from the Congressional Budget Office (CBO), we find the economy growing at an average annual rate of 2.4 percent over the years 2015-2020. CBO also projects average productivity growth for this period at 1.8 percent a year, meaning in principle that living standards can rise at roughly that rate. It also projects an average interest rate on 10-year Treasury bonds of 5.5 percent, this is only slightly higher than the low-point of the budget surplus years at the end of the Clinton administration.
In short, there is no evidence in these projections of the sort of crisis described in the Post article. It would be interesting to see the document(s) that provide the basis for the Post’s assertion.
The Washington Post (a.k.a. Fox on 15th Street) told readers that: “Official forecasts suggest that without sharp changes in federal spending or tax collections, the United States could enter into a downward spiral of indebtedness that by the end of this decade would erode the country’s ability to educate its children, care for the elderly or mount a robust national defense.”
Wow, that sounds really dire. It would have been great if they gave a source for this one because that is not what the standard sources say. For example, if we go to our most recent Budget and Economic Outlook from the Congressional Budget Office (CBO), we find the economy growing at an average annual rate of 2.4 percent over the years 2015-2020. CBO also projects average productivity growth for this period at 1.8 percent a year, meaning in principle that living standards can rise at roughly that rate. It also projects an average interest rate on 10-year Treasury bonds of 5.5 percent, this is only slightly higher than the low-point of the budget surplus years at the end of the Clinton administration.
In short, there is no evidence in these projections of the sort of crisis described in the Post article. It would be interesting to see the document(s) that provide the basis for the Post’s assertion.
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