And yes, this should scare you plenty:
The bond market is saying that it’s safer to lend to Warren Buffett than Barack Obama.
Two-year notes sold by the billionaire’s Berkshire Hathaway Inc. in February yield 3.5 basis points less than Treasuries of similar maturity, according to data compiled by Bloomberg. Procter & Gamble Co., Johnson & Johnson and Lowe’s Cos. debt also traded at lower yields in recent weeks, a situation former Lehman Brothers Holdings Inc. chief fixed-income strategist Jack Malvey calls an “exceedingly rare” event in the history of the bond market.
The $2.59 trillion of Treasury Department sales since the start of 2009 have created a glut as the budget deficit swelled to a post-World War II-record 10 percent of the economy and raised concerns whether the U.S. deserves its AAA credit rating. The increased borrowing may also undermine the first-quarter rally in Treasuries as the economy improves.
Read on for all of the gory details.
And in doing so, he points out the shortcomings of the CBO scoring process:
An admission from the Congressional Budget Office: Factor in the “doc fix”, and one finds that $59 billion is added to the deficit over the next ten years.
Remind me why anyone is supposed to think that the health care reform bill before the House is the best bill that we can get.
By Pejman Yousefzadeh
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Posted in Chequer-Board
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Also tagged Barack Obama, Congress, Democrats, Doc Fix, Economic Ignorance, economy, health care, Health Care Policy, Health Care Reform, National Debt, Obama Administration
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Democrats are ecstatic about the score given to the health care bill by the Congressional Budget Office. One wonders why, given a close analysis of the bill and the score. Let’s turn the mike over to Jeffrey Anderson:
For a variety of reasons, this tally doesn’t remotely reflect the bill’s real ten-year costs. First, it includes 2010 as the initial year. As most people are well aware, 2010 has now been underway for some time. Therefore, the CBO would normally count 2011 as the first year of its analysis, just as it counted 2010 as the first year when analyzing the initial House health bill in the middle of 2009. But under strict instructions from Democratic leaders, and over strong objections from Republicans, the CBO dutifully scored 2010 as the first year of the latest version of Obamacare. If the clock were started in 2011, the first full year that the bill could possibly be in effect, the CBO says that the bill’s ten-year costs would be $1.2 trillion.
March 15, 2010 – 10:22 pm
Andrew Biggs critiques the Center on Budget and Policy Priorities’s own critique of the Ryan fiscal roadmap. Key passage:
What’s a little disappointing is that the Congressional Budget Office report on Ryan’s plan has been available since late January, so there’s no need to rely on outdated Social Security Administration analyses of older versions of Ryan’s proposals.
Well, yes there is, if one wants to attack Paul Ryan for partisan purposes. But that’s about the only excuse.
March 14, 2010 – 10:24 pm
I suppose, as a fan of Rep. Paul Ryan, that I should be concerned that Krugman is going on, and on, and on about how bad the Ryan Fiscal Roadmap is; this is his latest post on the subject.
But then, I recall that Krugman doesn’t even seem to understand what he has written in his own economics textbook, and that he has a tendency to grossly mislead his readers when it comes to discussing the ideas of people Krugman doesn’t like. Remembering all of this, I think that I will put more stock in Ryan’s arguments.
I agree with this post almost completely and entirely. I am not as sanguine as is Amar Bhide is on the issue of immigration and education, but I am on board with everything else in the post. Go read.
But finances may cause the U.S. Postal Service to end Saturday deliveries. Over at his blog, Eric Zorn facetiously argues that we ought to get all of our mail on Saturdays, with every other day being mail-free. Of course, that argument is ridiculous, but perhaps only just barely ridiculous; it is difficult to imagine a monopoly as useless and value-less as the one that the Postal Service currently “enjoys.”
Remind me once again why I was supposed to think that government could effectively administer a public option for health care. As we can see, it can’t even competently manage its own finances:
A new congressional report released Friday says the United States’ long-term fiscal woes are even worse than predicted by President Barack Obama’s grim budget submission last month.
The nonpartisan Congressional Budget Office predicts that Obama’s budget plans would generate deficits over the upcoming decade that would total $9.8 trillion. That’s $1.2 trillion more than predicted by the administration.
The agency says its future-year predictions of tax revenues are more pessimistic than the administration’s. That’s because CBO projects slightly slower economic growth than the White House.
Republicans ought to be embracing Paul Ryan’s fiscal roadmap. That they refuse to hurts the GOP’s efforts to be seen as a credible, deficit-fighting party. And the claim on the part of many Republicans that Medicare need not be cut–or even means-tested–simply cannot be taken seriously. Everyone knows–or ought to know–that the current entitlement structure is simply unsustainable. One cannot acknowledge that, while claiming at the same time that Medicare benefits cannot or should not be reduced.
It is bad enough that Democrats have proven themselves to be so lacking in seriousness when it comes to putting forth a responsible fiscal policy. Republicans should do better than to play down to the standards Democrats set on this issue.
February 23, 2010 – 11:13 pm
As explained by Paul Ryan in a Q&A with the New York Times’s Deborah Solomon:
Your “Road Map,” we should explain, is a somewhat alarming document that proposes, in 600-plus pages, erasing the federal deficit by radically restricting the government’s role in social programs like Social Security and Medicare. The president described it as “a serious proposal.”
Right. And then the next day his budget director starts ripping me and then the day after that the entire Democratic National Committee political machine starts launching demagogic attacks on me and my plan. So when you hear the word “bipartisanship” come from the president and then you see his political machine get in full-force attack mode, it comes across as very insincere.
He seems genuinely pained by what he has called the “obstinacy” of Congressional Republicans and their just-say-no obstructionism.
You know, casting the other side as somehow nefarious and evil and poorly intended is the oldest trick in the book.
