The Post article on the Fed's monthly industrial production report told readers that "February's numbers gave economists other signs that manufacturing would continue to recover this spring, as the capacity utilization -- portion of plants used for production -- climbed to 72.7 percent from 72.5 percent." Umm no, that's not quite right. Overall industrial production did rise, but that was due to increases in mining and utility output. Manufacturing output actually fell by 0.1 percent in February from a level that was revised down by 0.1 percent from its previously reported level. Capacity utilization in manufacturing fell from 69.1 percent in January (previously reported as 69.2 percent) to 69.0 percent. This decline was undoubtedly in part attributable to bad weather, but the Fed's data certainly is not pointing towards an uptick in manufacturing. --Dean Baker

Okay, it's not exactly a pension fund, it's the Social Security trust fund that is cashing in some of the government bonds that it holds to pay benefits. This is the way the trust fund was designed to work, but AP somehow cannot find a reporter (or editor) who understands even the most basic facts about Social Security or for that matter Treasury bonds, which get called "IOUs" in the headline and four times in the article. (When GE has its next bond issue, will AP report on the auction of "GE IOUs?") The whole purpose of building up the trust fund was to help defray the cost of the retirement of the baby boom cohort. This meant that at some point it would be necessary to sell some of the bonds to pay benefits. This has happened somewhat sooner than had previously been predicted due to the economic crisis created by inept policy and Wall Street corruption. It is not clear why anyone should see this as a crisis for Social Security. The article also includes this non-sequitur: "Now the...

Paul Krugman is absolutely right in describing the economic relationship between the U.S. and China ; the United States has nothing to fear from a decision by China to stop buying U.S. government debt. However, the discussion of the U.S-China relationship may not be quite right. Krugman has the United States meekly asking China to raise the value of the yuan since 2003, with little effect. This certainly has been the public position of both the Bush and Obama administrations. However, negotiations don't take place in public. When the United States negotiates with China, there are many items on its list. Both the Bush and Obama administrations have pressed China about increased protection for U.S. patents and copyrights. They have pressed China for increased access for U.S. films and openings for the entertainment industry more generally. They also want to open the Chinese market to Citigroup, Goldman Sachs and other big financial firms. No one ever expects to get everything on their...

That is what readers could infer from Jackie Calmes' blognote in which she listed Social Security alongside Medicare and Medicaid as "fast-growing entitlement benefit program." Social Security is projected to grow at a 5.3 percent annual rate over the next decade, only slightly faster than the 4.4 percent projected growth rate of nominal GDP over this period. By comparison, Medicare is projected to grow at a 7.0 percent annual rate. It is also worth noting that Social Security is funded by a designated tax that is projected to keep the program fully funded until 2044. It appears that the NYT is unaware of the funding mechanism for Social Security. Given this designated tax it would make as much sense to cut Social Security as it would to cut interest payment on government bonds (i.e. default on the government debt), especially since interest is in fact a much more rapidly growing category of entitlement spending. The reference to Social Security appears in a statement telling readers...

It would be great if people who reported on the budget deficit for major news outlets could be required to know the basic accounting identities that get taught in every introductory economics class. The key one that almost none of them seem to know is that the trade deficit (X-M) is equal to the sum of public and private savings (T-G)+(S-I). This identity means that if the United States is running a trade deficit, then the sum of public and private savings must also be negative. That has to be true -- it is an identity. It's just like 2 + 2 = 4. It is always true. This matters for all the nutty deficit hysteria because no one every asks the deficit hawks how they would like to see the identity met. The U.S. has a large trade deficit because of the value of the dollar. At a given level of GDP, the main determinant of the trade deficit is the value of the dollar. Politicians and even many economists like to hyperventilate about "competitiveness" and talk about how we're going to improve...

The Post had a front page article with a headline warning readers that a "new round of foreclosures threatens housing market." Yes, well actually a huge oversupply of housing created by the bubble-driven construction boom is virtually certain to push prices back down to their trend level. This one really is not hard. Nationwide, inflation-adjusted house prices rose by more than 70 percent during the bubble. Over the hundred years from 1896 to 1996 they had just kept pace with the rate of inflation. Prices must fall by another 15 percent or so to get back to their long-term trend. Given this departure from long-term trends, and the continued massive oversupply of housing as measured by record vacancy rates, it would be very surprising if house prices stabilized at their current level. Another wave of foreclosures will be a factor depressing prices -- and could cause prices to overshoot on the downside -- but prices would be virtually certain to fall further in any case. The Post...