Brad DeLong is wrong about Fiscal Times

  Brad DeLong has a howling rant against the Fiscal Times this morning, apparently because he's outraged that the Washington Post's ombudsman opined on Sunday that it was ok for the Post to run occasional stories on fiscal policy from  the FT.

    Full disclosure: I have a vested interest here, because I have signed on as a paid contributor to the Fiscal Times and will writing on a semi-regular basis for it in the months ahead. 

     But for what it's worth, DeLong's screed is so pedantic, sophomoric and mean-spirited that it makes my blood boil.    He sounds like an insecure 10-year-old who's desperate to show that he's smarter than everyone else by heaping scorn on other kids in the room.  But the criticisms are more supercilious than smart.

     Other liberal critics, like Dean Baker, have protested the Post's arrangment with the Fiscal Times, noting that the start-up news service is being financed by Peter G. Peterson, a Republican billionaire who has been railing against budget problems for years. The critics worried that the Post would be running stories biased toward cuts in entitlement programs like Medicare and Social Security.   The critics also attacked the FT's first story in the Post, about support for a bipartisan commission to hammer out ways of reducing future deficits, noting that it quoted experts without mentioning that some of them had ties to Peterson as well.

    Those were fair questions, and the Post has agreed that some of the disclosures were inadequate.  But that's not what DeLong's blast is about. 

     He's arguing, based on a dissection of that first story, that the people who wrote it (not me, btw) are morons who don't know the first thing about this subject.

     He starts out by lambasting a metaphor that refers to a vote on raising the national debt limit as an "increased limit on the government's credit card."

    A credit card is a particular financial device that ought to be used for convenience only: it is something that you ought to pay off every month--and if you don't you are flushing money down the toilet by paying 18% interest a year and your finances are out of control. That's very different from the U.S. national debt ....

On and on he pontificates, blah blah blah for another hundred words or so, about the huge difference between the two limits.  How could anybody be so ignorant?  But really: it's a short-cut to keep from bogging readers down on a side topic (i.e, the legal debt limit, which isn't the subject of the story).  Short-cuts are inherently imperfect, but are readers being deceived by this one?  Get a life.

     Next, DeLong blasts the writers for saying the national debt is at a record "$12.4 trillion,'' because that's includes $4-plus trillion in debt to Social Security and other trust funds -- i.e. money the goverment owes itself.

     Here too, he winds on and on, smirking in condescension. Do the writers

     "...understand the difference between debt-subject-to-limit and debt held by the public? Do they know that there is a bunch of debt that are true obligations of the government that are not in fact subject to limit--right now and most notably the liabilities of the Federal Reserve? are not in fact subject to limit--right now and most notably the liabilities of the Federal Reserve?"     Etc. etc.

      Well, hold on a minute, cowboy.  The national debt IS $12.4 trillion, as the government defines it. Yes, economists focus on debt held by the public -- i.e., $7.8 trillion -- because that's the part that has to be serviced in cash rather than more IOU's.  But that doesn't mean the Social Security debt is irrelevant.   Those are real obligations, and it won't be long before a lot of them are cash obligations.

     In terms of communicating to to the public, is $12.4 trillion more accurate than $7.8 trillion?  Maybe, maybe not.  What about Brad's formulation: "$12.4 trillion, $4.5 trillion of which is internal within-government accounting and $7.9 trillion is debt held by the public?"   If you are a lay reader, I seriously doubt, your head will be any clearer with this verbiage.

    Brad skewers at length all kinds of other alleged short-comings. The article shouldn't have said the commission would "force'' Congress to deal with hard choices, because Congress would still vote on the commission recommendations.  The article shouldn't have implied (though I don't think it did) that this was a "plan'' to reduce future deficits,when it was a plan for a bipartisan commission. 

     DeLong's strangest and most unfair criticism is on a section of the story that provides reason for doubting that a bipartisan deficit-whacking commission will do any good at all.   That section notes that similar commissions were flops, and quotes Sen. John Rockefeller on the point. 

     To DeLong, this section proves that the proposed commission wouldn't force Congress to do anything, and thus proves that the writers are dumb. 

     What's bizarre is that DeLong's bigger point is that the Fiscal Times may be a propoganda engine for Pete Peterson, whose foundation champions a bipartisan commission and is running ads.

    So here we have the Fiscal Times article reporting facts that truly raise doubts about such a commission, and Brad attacks it on that score too.  It's a cheap shot, and unwarranted.