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From about 2000 Dean Baker reported that we were in a real estate bubble which would end with a collapse. In Jan 2004 he even offered a $1000 prize for the economist who could make the best attempt at disproving him (and paid it to Hilary Croke a researcher for the Fed. )
Here was Baker last week, commenting on the Washington Post's view of the economy.
However the real gem is this line:
"the improvement in the short-term forecast has removed the air of crisis that has hovered around the budget deficit since President Obama took office."
Wow, an "air of crisis." And where did this "air of crisis" come from? It surely did not come from financial markets, where investors have shown a willingness to lend the United States government trillions of dollars at very low interest rates in the years since President Obama took office. It certainly did not come from competent economists who were able to recognize that the large deficits were a direct result of the economic collapse in 2008. It also did not come from the millions of people who lost their jobs due to the downturn and looked to government stimulus as the only possible source of demand that could re-employ them.
A more accurate statement might be that:
"the improvement in the short-term forecast has removed the air of crisis around the budget deficit that the Washington Post and its allies have sought to promote since President Obama took office."
Let's be serious here, the crisis was invented by people in Washington who have an agenda for cutting Social Security and Medicare. (Flavius' emphasis)
That is as clear as day. The deficit crisis does not actually exist in the world. In the world we have a crisis of a grossly under-performing economy that the Post and its allies have attempted to perpetuate.
Any time you're tempted to agree with the viewing-with-alarm economists.......don't. Just remember Let's be serious here, the crisis was invented by people in Washington who have an agenda for cutting Social Security and Medicare.
Then Baker closed with
I'm off on vacation until Friday, May 24. Remember, don't believe anything you read in the paper until I'm back.