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. There are two logical problems with the assertions in the piece. If investors flee U.S. bonds because they fear default, where are they going to put their money? If the U.S. actually did default, then almost any other asset will also take a huge hit. For example, holding U.S. stock or bonds would be really really stupid if you thought that the U.S. government was going to default on its debt. This would in turn imply a general flight from dollar denominated assets, which in turn would lead to a plunge in the value of the dollar. A plunging dollar would in turn lead to soaring exports and a would cause the economy to boom rather than crash, as the article claims. The other...

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

That is undoubtedly the question that many would have after reading a Post article on an effort to stop stimulus spending on wind energy because some of the turbines are built in China. The point of stimulus was of course to create jobs in the United States. If it turned out that spending in a particular area was not creating jobs in the United States, then it doesn't fit very well in a stimulus package (although it may still be useful spending). The Post article repeated a few assertions, but it did not provide readers any basis to assess the key questions: how many jobs are being created here? what share of the wind turbines are constructed in the U.S? how large are the savings from buying them from abroad? Since these questions were not addressed, readers of the article would have little basis for assessing the debate over energy spending in the stimulus package. --Dean Baker

The NYT told readers that: "The pound fell to $1.4954 on Tuesday, its lowest level against the dollar in nearly 10 months. The yield on 10-year government bonds, known as gilts, slid as investors fretted that Parliament would be too fragmented after a crucial election in May to whip Britain’s messy finances back into shape." That's pretty good that the NYT can read concern about this complex scenario into the market's 1-day movement. It is especially impressive since the yield on the 10-year bonds seemed to go the wrong way for this story. A lower bond yield usually means that investors are less concerned about the country's prospects and therefore require a lower risk premium. The biggest threat to the UK's economy is that it appears to have re-inflated its housing bubble. This is setting up the country for a further economic collapse at some point in the future when interest rates return to more normal levels. The NYT's market insiders were unable to see to the problems developing...

The NYT reviewed a new book by Jaron Lanier, who we are assured is a very creative person and one of the early pioneers of the web. According to the review, Mr. Lanier is very upset about people getting material at no cost over the web. His preferred solution is harsher punishments for copyright violation. Of course, another possible direction would be to devise alternative mechanisms for financing creative work. But that would require creativity. --Dean Baker

Robert Samuelson apparently doesn't believe that he has much of a case for his budget deficit scare stories. How else can we explain the fact that he expresses budget deficits in dollar terms rather than as share of GDP. Yes, the budget deficit is a REALLY BIG NUMBER. That would be true even if it were a tiny number relative to the size of the economy. Suppose the deficit was $1,687,435. That is a really big number since almost none of us will ever see anywhere near this much money. However, for the U.S. economy, a deficit of this size is trivial. It is equal to 0.011 percent of GDP. The government could run deficits of this size forever and its ratio of debt to GDP would be continually shrinking as its GDP growth vastly exceeds the rate of growth of the debt. In this vein, Samuelson notes that the baseline budget is projected to be $752 billion in 2015 and that even if President Obama's deficit commission reaches its target, the deficit will still be $571 billion. Measured as a share...