That might not sound scary to most people, but this was the punch line of a front page NYT news story.... The fourth paragraph asserts that:
Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.
No, this is wrong.... [N]o evidence [is] presented in this article that the rise in interest rates will place the U.S. government in a situation where it will be unable to pay its bills.... [N]o one cited in this article makes such a claim.
The article is also completely unbalanced...
It is too bad. The three things people need to know about the deficit are:
- In the long term--after 2020--we get health care spending under control or else.
- In the medium term--between 2012 and 2020--we don't have a debt and deficit problem if congress sticks to PAYGO; we do if it doesn't.
- In the short term--between now and 2012--our problem is not that our deficit is too large but that it is too small.
And Edmund Andrews's piece doesn't help people learn any of those three.