• Deficit Commission Plots to Overhaul Social Security Behind Voters’ Backs

    That is what the New York Times reported today, although it used somewhat different language.  It told readers that: The group, which has a Dec. 1 deadline for recommending how to reduce the annual deficits swelling the federal debt, purposely has done little to date beyond five public hearings, and it has decided nothing lest […]

  • David Broder Calls for War with Iran to Boost the Economy

    This is not a joke (at least not on my part).  David Broder, the longtime columnist and reporter at a formerly respectable newspaper, quite explicitly suggested that fighting a war with Iran could be an effective way to boost the economy.  Ignoring the idea that anyone should undertake war as an economic policy, Broder’s economics […]

  • The Impact of Income Distribution on the Length of Retirement

    Social Security has made it possible for the vast majority of workers to enjoy a period of retirement in at least modest comfort without relying on their children for support.  The average length of retirement has increased consistently since the program was started in 1937.  However, the increase in the normal retirement age from 65 […]

  • Surging Inventories Sustain Third-Quarter Growth

    Inventories grew at a $115.9 billion annual rate in the third quarter, the highest rate of increase since a $117.2 billion rise in the first quarter of 1998.  This increase added 1.44 percentage points to growth for the quarter, bringing the rate to 2.0 percent. Final demand growth, which excludes fluctuations in inventories, was just […]

  • Lower-End Homes Pull Prices Down in August

    The August Case-Shiller 20-City Index showed that house prices have resumed their decline, dropping by 0.2 percent for the month.  Prices fell in 15 of the 20 cities in the index for the month. The drop was led by a decline in the prices of homes in the bottom tier of the Case-Shiller index.  Prices […]

  • The Myth of Expansionary Fiscal Austerity

    Introduction Recently governments, economists, and international financial institutions have been debating the merits of further fiscal stimulus to combat the Great Recession versus fiscal austerity or “adjustment” — that is, higher taxes and/or lower government spending — to combat budget deficits.  Some supporters of austerity have gone as far as arguing that fiscal adjustment could […]

  • Feel No Pain: Why a Deficit in Times of High Unemployment Is Not a Burden

    With the economy suffering from near double-digit unemployment, public debate is dominated by concerns over the budget deficit and national debt.  This discussion is unfortunate both because there is no reason for people to be concerned about the deficit at present, and more importantly, because it discourages action on the unemployment crisis that is devastating […]

  • Pharmaceutical Industry-Funded Study Shows That Unauthorized Drug Copies Save Tens of Millions

    This is the clear implication of a new industry funded study, even if USA Today essentially ran an ad for the pharmaceutical industry by headlining its piece: “growing problem of fake drugs endangers consumers’ health.”  The article highlighted the fact that unauthorized copies of drugs sometimes do not meet the same standards as the official […]

  • Unemployment Edges up to 9.6 Percent as Weak Job Growth Continues

    The unemployment rate edged up to 9.6 percent in August as the economy shed 54,000 jobs.  The decline was entirely attributable to the loss of 114,000 temporary Census jobs.  Excluding these jobs, the economy created 60,000 jobs.  With job growth for the prior two months revised up by 123,000, excluding the Census jobs, the August […]

  • Seven Key Facts about Social Security and the Federal Budget

    Over the summer there has been a hot debate about Social Security and the federal budget, especially in relation to the National Commission on Fiscal Responsibility and Reform.  It is reasonable to expect that the major players in this debate will do their homework about the issues under consideration.  In order to help them in […]

  • Making Wall Street Unhappy Won’t Reduce Private Investment

    Mr. Andrew Ross Sorkin of the New York Times noted Wall Street’s shift of funding to Republicans and told readers that: “Mr. Loeb’s views, irrespective of their validity, point to a bigger problem for the economy: If business leaders have a such a distrust of government, they won’t invest in the country.  And perception is […]

  • Burning Down the House: Where the Housing Market Is Going

    The howls of surprised economists were everywhere last week as the government reported on Tuesday that July had the sharpest single-month plunge in existing home sales on record.  The next day the Commerce Department reported that new home sales hit a post-war low in July. All the economists who had told us that the housing […]

  • Nonsense from Deficit Hawks Threatens to Keep Tens of Millions Needlessly Unemployed

    The New York Times told readers that the Fed’s ability to take steps to boost the economy are limited because: The dramatic expansion of the national debt — which began in the Bush administration, via hefty tax cuts and two wars — has ratcheted up fears that, one day, creditors like China and Japan might […]

  • How Will Cuts to Social Security Affect Spending by Retirees?

    For some reason this question was never raised in a WSJ piece reporting on the expected reduction in spending by baby boomers who will be retiring over the next decade. Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR).  He is the author of False Profits: Recovering from the Bubble […]

  • What’s So Great about the Great Recession?

    David Leonhardt tells readers that the Great Recession has had some silver linings for many workers.  High on his list is continued wage growth.  This is misleading.  All the real wage growth in this downturn occurred in the months of November and December of 2008.  This was due to a plunge in the price of […]

  • Silliness about the Risks of Deflation

    Reporters continually discuss deflation as though something magical will happen if the rate of price growth crosses zero and turns negative.  This is silly.  The point is that a lower rate of inflation raises real interest rates at a time when we want lower real interest rates.  We can’t lower nominal rates below zero, so […]

  • Robert Samuelson Is Worried That the United States is Becoming Less Crowded

    Yes, in the strange but true category, we have a columnist with a major national newspaper worrying that population growth in the United States could slow or even reverse.  Yes, I have the same fear every time I push my way into the metro at the rush hour or get caught in a huge traffic […]

  • The New York Times Goes on the War Path to Cut the Pensions of the Upper Class (like Teachers, Custodians, and Garbage Collectors)

    Columnists are given considerably more leeway than reporters, but serious newspapers still expect their pieces to bear some relationship to reality.  This is why the Ron Lieber’s column warning of a class war (“The Coming Class War over Public Pensions”), with government workers as the new “haves,” may leave many readers wondering about the New […]

  • Job Loss Sends Employment Ratio Downward

    For the second consecutive month, the economy created virtually no jobs, net of temporary Census jobs.  The Labor Department reported that the economy lost 131,000 jobs in July, 12,000 less than the 143,000 drop in the number of temporary Census workers.  The June numbers were revised down by 100,000 to show a gain of only […]

  • 2010 Social Security Trustees Report: Worse Present, Much Brighter Future

    The Social Security trustees painted a considerably more dismal picture of the near-term economic situation in the 2010 trustees report than in their 2009 report.  At that point, they did not fully appreciate the severity of the economic downturn.  The 2009 report projected that the unemployment rate would average 8.2 percent for 2009 and 8.8 […]