Dean Baker

Recent Articles

The NYT Does Not Like Social Security

That is what can be concluded from its decision to call the Treasury bonds held by the Social Security trust fund "IOUs."
This is not the normal term applied to government bonds in the New York Times or anywhere else. This is a pejorative term that has the effect of undermining the credibility of the trust fund. That is the sort of comment that is usually reserved for its opinion pages.

Robert Samuelson's New Economic History

While rightly blaming Greenspan for the economic downturn, Robert Samuelson gets a few things wrong in his Post column. First, he attributes the revitalization of the U.S. economy to the end of the double-digit inflation of the 70s. Actually, most of the drop in inflation had been completed by the early 80s. However, there was no uptick in productivity growth from the inflation-wracked 70s until the mid-90s. It is also worth noting that the whole world saw a sharp drop in inflation over this period with no noticeable uptick in productivity growth in the vast majority of countries.

Japan's Central Bank Holds Much of Japan's Debt

An AP story in the Washington Post on the IMF's warnings about debt levels told readers that: "Japan's debt is proportionately even bigger -- about twice its GDP -- but the impact is cushioned because most is held by Japanese households." Actually the fact that the debt is mostly held by Japanese households by itself is of little consequence. If Japan had been running large trade deficits and foreigners had bought private assets but not government bonds, then Japanese households and its economy would be in the same situation as if foreigners had bought its debt.

NPR Covers Up for Economists' Responsibility for Pennsylvania Pension Shortfall

A Morning Edition piece on the shortfall in Pennsylvania's public employee pension funds told listeners that just 10 years the funds were over-funded, then the good times went away. Actually, 10 years ago the stock market was in the middle of a huge bubble. This temporarily inflated the assets of pension funds, including the public pension funds in Pennsylvania.

$85 Billion is 2 Percent for the Pharmaceutical Industry

The NYT article on the passage of the health care reform package noted that the pharmaceutical industry had agreed to reduce their charges by $85 billion over the next decade. It would have been helpful to tell readers that this is a bit more than 2 percent of projected revenues over this period for the industry. The patent monopolies granted by the government on prescription drugs give them about three times as much money every year.

--Dean Baker

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