Monday Smackdown: The Stupidest Paragraph in Perhaps the Stupidest Article Ever Published
We are interrupting our DeLong Smackdown Watches (and other things to bring you news that International Economy is now in the running for the Washington Post for the title of publication that exercises the very least quality control--that takes the least care to make sure that the articles it publishes inform rather than mislead their readers.
Let's turn the mike over to Menzie Chinn:
Menzie Chinn: The Stupidest Paragraph in Perhaps the Stupidest Article Ever Published: Bruce Bartlett brought my attention to this article...
...which Mark Thoma mused was “The Stupidest Article Ever Published”. From "The Inflation Debt Scam", by Paul Craig Roberts, Dave Kranzler and John Williams[, in International Economy]:
To understand how risky the rise of debt is, nominal debt must be compared to real GDP. Spin masters might dismiss this computation as comparing apples to oranges, but such a charge constitutes denial that the ratio of nominal debt to nominal GDP understates the wealth dilution caused by the government’s ability to issue and repay debt in nominal dollars...
I’m not a spin master, and yet I cannot help but dismiss this calculation as exactly comparing apples to oranges. Nominal debt divided by nominal GDP is expressed in years--essentially years worth of GDP necessary to pay off the debt. I can understand what this calculation yields. In contrast, nominal debt is in $, real GDP is in chained 2009 dollars/year, so nominal debt divided by real GDP is a number expressed in years times dollars per chained 2009 dollars....
As far as I can tell, the article is merely an excuse for Williams to haul out the fully discredited “Shadowstats” one more time. By the way, according to Shadowstats, the US economy has been shrinking nonstop since 2004-05, on a year-on-year basis.... So, if this is not the stupidest article ever, it is in the running (along with Don Luskin’s 2008 gem [in the Washington Post]).
