Dean Baker's Blog, page 457

Washington Post Editorializes for Medicare Cuts on Page 3

The Washington Post long ago ended the separation of its news and editorial departments, therefore it was not surprising to see the page three article complaining that "experts" are worried that the rhetoric of the presidential campaign will make it harder to find a "solution" for Medicare. As is standard practice, the Post's corral of experts were exclusively people who largely agree with its editorial position on Medicare: that there have to be large cuts to the program.

The three people pr...

Casey Mulligan Still Has Not Heard of Deficit Spending

Casey Mulligan misrepresented President Obama's claims on unemployment insurance, making his plans to have deficit spending analogous to Governor Romney's trickle down economics. Mulligan claims the two plans are analagous in the sense that Romney argues that ordinary workers can be made better off by redistributing income upwards, while Obama argues that business owners can be made better off by giving unemployed workers more generous unemployment benefits.

There is a fundamental difference...

Budget Cutting Caused U.K. Economy to Shrink at Nearly a 3.0 Percent Annual Rate in the Second Quarter

It is standard in the United States to report GDP growth at annual rates. This is not true everywhere in the world, where growth rates are often expressed at quarterly rates.

This is where reporters and editors come in. Using the magic of modern mathematics, quarterly growth rates can be converted into annual rates. Usually multiplying by 4 will do the trick, but to be strictly kosher one should take the growth rate to the fourth power.

This means that when the NYT reported data from the Ban...

President Obama's Medicare Plan Eliminated Two-Thirds of the Projected Shortfall: Tell a Reporter or Columnist Near You

It is popular among Washington elite types to tut-tut criticisms of the plan put forward by Representative Ryan and the Republicans to replace Medicare with a voucher program by claiming that "at least he has a plan." This is supposed to be in contrast to President Obama and the Democrats who have no plan to deal with Medicare's projected shortfall.

It's possible that these Washington insiders missed it, but President Obama and the Democrats pushed through a piece of legislation called the "A...

Washington Post Columnist Charles Lane Thinks the Elderly Are Wealthy Because They Can Afford to Pay Off Their Mortgage (see correction)

The Washington Post continued its war on Social Security and Medicare today with a column by Charles Lane that told readers that seniors are wealthy because they have enough money (almost) to pay off their mortgage. No, I'm not kidding.

Lane wrote:

"Last year, the Pew Charitable Trusts reported that the median net worth of households headed by an adult 65 or older rose 42 percent in real terms between 1984 and 2009, to $170,494. During the same period, median net worth for households headed b...

This Election is About Arithmetic, Not Values

In his NYT column this morning Roger Cohen repeated a theme about the presidential race that the punditry is anxious to shove down the public's throat:

"Saving Private Romney is going to involve an ideological battle — over the size of government, the extent of Americans’ obligations to one another, even the soul of the country — that is no less than the United States deserves."

This is utter nonsense. In fact on the vast majority of issues affecting the well-being of typical Americans Govern...

President Obama Did Not "Raid" the Medicare Trust Fund

The NYT had an article reporting on how the presidential campaigns plan to make Medicare an issue in Florida as they compete for older voters. At one point it quotes Ed Gillespie, a senior adviser to the Romney campaign:

"The fact is, we’re going to go on offense here. Because the president has raided the Medicare trust fund to the tune of $716 billion to pay for a massive expansion of government known as Obamacare."

It would have been helpful to point out to readers that President Obama did...

Lower Trading Costs Only Benefit Long-term Investors If They Are Not Offset by More Trading

The NYT had an interesting article on the growth of high-speed trading on U.S. stock exchanges. While the piece notes the risks that these trading system can pose to long-term investor by taking profitable opportunities ahead of them, it reports the industry's claim that it benefits long-term investors:

"the new trading sites and high-speed trading firms have managed to fend off critics by pointing to benefits that long-term investors have derived from the sophisticated markets.

One of the mo...

Lesson for Reporters: Social Security Does NOT Add to the Budget Deficit

Associated Press decided to use a "Fact Check" to wrongly tell readers that Social Security adds to the budget deficit. The piece acts as though Social Security's impact on the budget is somewhat mysterious, with supporters of the program, like Representative Xavier Becerra and Senator Bernie Sanders, being confused into thinking that the program doesn't add to the deficit, even though it really does.

There actually is not much mystery here to those familiar with government budget documents....

Robert Samuelson Goes to Bat for Paul Ryan: Strikes Out

Governor Romney's decision to select Paul Ryan as his running mate has condemned the country to 90 days of ridiculous news stories and columns about a choice on the size and role of government. The debate is silly because its explicit assumption is that Paul Ryan wants a small role for government. There is no evidence to support this assertion.

The impact of the government on the economy goes far beyond the amount that it taxes and spends. The way in which structures markets has a far more im...