Then again: what is his knitting? He's an expert on everything, isn't he?
I should say I really enjoy reading Steyn's pieces and his books. I'm a regular reader on his blog. He writes beautifully, wittily, pungently, cogently. Just not always correctly.
He's robust and correct in his writing on Islam, free speech, human rights and so on.
But when he writes about the US economy? Fuggedabout it.
Take his latest piece, "Sorry, Newt, only the debt ceiling will reach the moon".
He says the US has "unprecedented world-record brokeness". The US is not broke. Broke means you can't repay your debts, and is specifically defined as being when you can't pay the interest on your debt. The US interest payments on its debt is at 3% of GNP and was higher in the 80s (4%). Economists say that the level of concern is when interest repayments reach 12% of GNP. The US is a long way from that.
More: the US interest payment as percent of GNP is dropping. Just yesterday, for example, the US announced that it would need to borrow $US 400 billion less than was previously forecast, so interest payments are dropping, not increasing.
As for "world-record", they're only world-record because the US has a "world record" GNP. The US debt has been a "world record" since 1945, simply because of the size of its economy. And this debt is known as US Treasuries, a favoured safe-haven investment for investors. And they still are: US Treasury rates are at record lows. Were the debt (ie Treasuries) a concern, the markets -- something Steyn strongly supports (as do I) -- would have bid the prices down, and hence interest rates up. There's no hint of that. Clearly the markets know something Steyn doesn't.
He talks of the $US 1.5 trillion budget deficit. And indeed that's what it's projected to be. But it's coming down, by projections, and is nowhere near the high of the post-war levels. Again these levels of deficit are easily handled by issue of Treasuries.
He's wrong too about China. He talks scarily of the debt held by his invented "First National Bank of Shanghai". But as I showed here, the main US debt is owned by Americans. China only has about 7.5% of US debt. That's not something scary. China is the largest foreign holder of US debt and is not likely to sell, as the US is its major market.
So, no, Mark, the debt won't "reach the moon". It'll stay firmly planted on the earth: in the US to be specific.
I should say I really enjoy reading Steyn's pieces and his books. I'm a regular reader on his blog. He writes beautifully, wittily, pungently, cogently. Just not always correctly.
He's robust and correct in his writing on Islam, free speech, human rights and so on.
But when he writes about the US economy? Fuggedabout it.
Take his latest piece, "Sorry, Newt, only the debt ceiling will reach the moon".
He says the US has "unprecedented world-record brokeness". The US is not broke. Broke means you can't repay your debts, and is specifically defined as being when you can't pay the interest on your debt. The US interest payments on its debt is at 3% of GNP and was higher in the 80s (4%). Economists say that the level of concern is when interest repayments reach 12% of GNP. The US is a long way from that.
More: the US interest payment as percent of GNP is dropping. Just yesterday, for example, the US announced that it would need to borrow $US 400 billion less than was previously forecast, so interest payments are dropping, not increasing.
As for "world-record", they're only world-record because the US has a "world record" GNP. The US debt has been a "world record" since 1945, simply because of the size of its economy. And this debt is known as US Treasuries, a favoured safe-haven investment for investors. And they still are: US Treasury rates are at record lows. Were the debt (ie Treasuries) a concern, the markets -- something Steyn strongly supports (as do I) -- would have bid the prices down, and hence interest rates up. There's no hint of that. Clearly the markets know something Steyn doesn't.
He talks of the $US 1.5 trillion budget deficit. And indeed that's what it's projected to be. But it's coming down, by projections, and is nowhere near the high of the post-war levels. Again these levels of deficit are easily handled by issue of Treasuries.
He's wrong too about China. He talks scarily of the debt held by his invented "First National Bank of Shanghai". But as I showed here, the main US debt is owned by Americans. China only has about 7.5% of US debt. That's not something scary. China is the largest foreign holder of US debt and is not likely to sell, as the US is its major market.
So, no, Mark, the debt won't "reach the moon". It'll stay firmly planted on the earth: in the US to be specific.
