Dean Baker's Blog, page 224

Deficit Hawks Take Over NYT: Warn of China's "Ballooning" Government Debt

Yep, it seems that China now has a gross debt equal to 43.2 percent of its GDP, according to the I.M.F. By comparison, the gross debt of the United States is over 104 percent. But, the NYT apparently thinks China has a big problem here.

This does matter, because insofar as the main problem with China's economy is a lack of demand, it can be easily countered with additional government spending. Of course if the government were up against some sort of borrowing constraint due to an excessive de...

It's Monday, and Yes, Robert Samuelson Wants to Cut Social Security and Medicare

I know this is getting old, but let's go over the latest version. Robert Samuelson is unhappy about the presidential candidates' "flight from reality," which to him means they don't want to cut Social Security and Medicare, restrict immigration of less-educated workers (he means Democrats here), and promote more rapid economic growth. I will focus on the Social Security and Medicare story.

Samuelson tells us:

"Inevitably, the costs of Social Security, Medicare (federal health insurance for th...

George Will, Bernie Sanders, Freedom and Income Inequality

George Will really takes it to Bernie Sanders in his column this morning.

"The fundamental producer of income inequality is freedom. Individuals have different aptitudes and attitudes. Not even universal free public education, even were it well done, could equalize the ability of individuals to add value to the economy."

Got that? Bill Gates is incredible rich because of his aptitude and attitude; the government's willingness to arrest anyone who infringes on the patent and copyright monopol...

Serious Confusion About Fannie, Freddie, and Homeownership at the Washington Post

No one reads the Post's opinion pages for serious economic analysis, and Bethany McLean's Outlook piece on Fannie Mae and Freddie Mac reminds us why. While the basic point is fine (we should keep Fannie and Freddie), the argument is more than a bit confused.

The problem starts near the beginning when McLean tells us that GSE stands for "government-supported entities." In fact the acronym is for "government sponsored enterprises." The government created Fannie and Freddie and then turned them...

More on TBTF: Quick Rejoinder to Mike Konczal

Mike Konczal has picked up on my post responding to his piece on too big to fail. Just to give folks a quick orientation, the point of entry here was a Paul Krugman post saying that Dodd-Frank had largely ended too big to fail (TBTF), which linked to Mike's piece.

Before getting to any of the nitty-gritty, I am not sure that we are actually arguing over anything. Mike's intro says:

"My point isn’t to say that the subsidy is completely over. Nor, as I’ll explain in a bit, is it to say that TB...

Was Poverty Reduction in the Developing World Worth the Hit to U.S. Workers?

That's the question that has been raging across the Internet following a piece in the NYT by Paul Theroux. Theroux decried the poverty in the South in the United States and bemoaned the fact that it was partly attributable to the outsourcing of jobs to the developing world. This prompted commentary by Annie Lowrey and Branko Milanovic and others, asking whether the gains for the poor in the developing world were worth whatever losses might have been incurred by the working class and poor in t...

Paul Krugman and the End of Too Big to Fail Subsidies

Paul Krugman used his column today to tell us that any Democrat in the White House will take a tough line on regulating Wall Street. I hope that he is right, but am a bit more skeptical given past associations. But beyond the speculation, there is one factual matter where I would differ his assessment.

At one point he argues that the implicit "too big to fail" (TBTF) subsidy for large banks has mostly disappeared due to the Dodd-Frank reforms. He cites a blog post by Mike Konczal, which in tu...

Paul Ryan: Top Republican Budget Wonk, Wants to Shut Down Air Traffic Control System, Food and Drug Administration, National Institutes of Health and Every Other Non-Defense Portion of Government

Like the rest of the Washington media, the New York Times respects Representative Paul Ryan, the current chair of the House Ways and Means Committee and possibly next speaker of the House. An article headlined "devotion to fiscal policy may keep Ryan from taking House speaker's job" begins by telling readers about Ryan's "sweeping budget proposals." It then goes on:

"Republicans, on the other hand, passionately embraced them [Ryan's budget proposals], and Mr. Ryan came to be seen as one of h...

The Six-Hour Work Day: Preparing for the Attack of the Robots

We all have heard the stories about how the robots are going to take our jobs. The line is that innovations in computer technology will make robots ever more sophisticated, allowing them displace a rapidly growing number of workers. This could leave large numbers of workers with nothing to do, implying a massive amount of long-term unemployment.

There are two basic problems with this story. The first is a logical problem. The story of worker displacement by technology is not new, it goes back...

NPR Has Not Heard, Health Care Spending Growth Has Slowed: Touts Bush Plan

Yep, it's hard to find out about the path of health care costs. You would probably have to go to one of the government websites, or read a newspaper, or maybe even listen to National Public Radio. In a piece discussing Republican presidential candidate Jeb Bush's health care plan, which repeals the Affordable Care Act (ACA), NPR told listeners that health care costs have been growing rapidly.

This is in fact not true. Since 2008, health care costs have barely outpaced the overall growth of th...