Dean Baker

Recent Articles

Defense Spending: 4.7 Percent Is Closer to 5 Percent Than 4 Percent

The NYT told readers the defense spending in the United States is equal to 4.0 percent of GDP. The Congressional Budget Office reports that it was 4.6 percent of GDP in fiscal 2009 and will be 4.7 percent of GDP in fiscal years 2010 and 2011.

--Dean Baker

The Fed Can Control Long-Term Interest Rates

The Washington Post had another piece pushing deficit scare stories. This time it tells readers that Greece's problems could spillover to the U.S. According to the piece, fears of a Greek default could lead investors to become more worried about a U.S. default, pushing up interest rates on U.S. government bonds.

David Brooks Is Worried About the Invasion of Martians

Okay, he said "runaway federal spending," but as long as you're making stuff up, you might as well make it invading Martians. It's no less true and a hell of a lot more exciting.

As those of us here on planet earth know, there is no credible story of runaway federal spending. The budget deficit exploded because of the recession, which in turn was caused by the collapse of an $8 trillion housing bubble. But, Brooks needed copy for his NYT column, so runaway federal spending it is. I still think he should have talked about invading Martians.

--Dean Baker

Good News From Ireland?

The NYT contrasts the resistance to austerity measures in Greece with the enthusiastic embrace of budget cutbacks by the Irish government. It is worth noting that Ireland's unemployment rate has increased from 4.6 percent before the crisis to 13.0 percent in the most recent data. It is unlikely that many of the economists and policymakers who promoted policies that lead to the crisis, or the bankers who profited from these policies, are among the 13.0 percent of the labor force who are unemployed.

--Dean Baker

Secret Data Source Overlooked by the Media

On Wednesday of every week the Mortgage Bankers Association releases its index of mortgage applications which provides data on applications for mortgages for both purchase mortgages and refinancing. For some reason this index is almost completely ignored by economic reporters.

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