DeLong Smackdown Watch: What Does Robert Lucas Believe Edition?
America’s Financial Leviathan: Project Syndicate

Why Oh Why Can't We Have a Better Press Corps? Yet Another Washington Post Edition

Outsourced to Dean Baker:

Social Security Is NOT Selling Government Bonds: In an article discussing the implications of the extension of the payroll tax cut, [Jia Lynn Yang of] the Washington Post told readers:

This year, the Social Security system projects that it will pay out $46 billion more in benefits than it will collect in cash. It made up for the shortfall by redeeming Treasury bonds bought in years when there were cash surpluses.

This is not true. The Social Security trust fund is projected to earn $114.9 billion in interest on the bonds it holds. It will use a portion of these earnings to pay current benefits. It will not be redeeming its bonds.