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NOW THIS IS HOW TO ILLUSTRATE DEFICIT DISCUSSIONS

June 22, 2005

The headline of Martin Sullivan's piece in Tax Analysts subscriber-only edition this morning is reassuring, in a not very reassuring way: "Economic Analysis: U.S. Financing Crises at Least a Decade Away"

He concludes:

By all historical and international standards, the United States is not close to any sort of financial meltdown, despite large fiscal and current account deficits in 2005. The first indications of any financial instability are likely to occur in about 10 years when, if there are no significant changes in law to reduce the federal deficit, the United States could lose its AAA bond rating. Even then, U.S. debt would still be investment grade. And it would still be another decade after that before the risk of default became significant.

Expecting to be around still in 10 and 20 years, this is sort of good news; we're not dead yet. But more impressive is Mr. Sullivan's use of graphics. No, not this:

THIS:

It's not clear what this illustrates, but it's not clear anyone cares. The picture is near a section titled "Gloom and Doom." If that's what doom looks like, I'm not going to worry about it.

More of this, and they'll stop calling economics the "dismal science."

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