Historians at Play
The People Who Sell Their Forecasts to Paying Clients Believe the Stimulus Is Working

In Which Dean Baker Is Unhappy with the New York Times's Edmund Andrews

Dean Baker:

In Just a Decade the U.S. Interest Burden Could Be as High as It Was in 1992!!!!!!!:

That might not sound scary to most people, but this was the punch line of a front page NYT news story.... The fourth paragraph asserts that:

Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.

No, this is wrong.... [N]o evidence [is] presented in this article that the rise in interest rates will place the U.S. government in a situation where it will be unable to pay its bills.... [N]o one cited in this article makes such a claim.

The article is also completely unbalanced...

It is too bad. The three things people need to know about the deficit are:

  • In the long term--after 2020--we get health care spending under control or else.
  • In the medium term--between 2012 and 2020--we don't have a debt and deficit problem if congress sticks to PAYGO; we do if it doesn't.
  • In the short term--between now and 2012--our problem is not that our deficit is too large but that it is too small.

And Edmund Andrews's piece doesn't help people learn any of those three.