The professor said that if we didn't get health care costs under control, in 30 years the US government would not be able to sell Treasury bonds.
The professor didn't seem to know anything about this and gave Washington 30 more years before the proverbial hits the fan.
One looks in vain to the US financial media for accurate economic information. Currently, Wall Street, the White House, and the media are hyping a new sign of economic recovery--"surging" June home sales. John Williams at shadowstats.com predicted this latest reporting deception.
Here is the way Williams explains how statistics can produce false signs of recovery. The economy has been contracting for so long that a plateauing of the falloff in home sales compared to the previous time period's more rapid contraction can appear like a gain.
Williams explains other data distortions likely to create false hopes and lead to investment losses. Financial stresses from the current state of the economy have changed behavior. This means that normal seasonal adjustments to statistical data can result in misleading information.
For example, the recent decline that was reported in seasonally- adjusted new unemployment claims was a result of the normal adjustments for the retooling of auto lines that did not, in fact, take place to the normal extent due to the bankruptcies and uncertainties. Adding in seasonal adjustments that did not in fact take place artificially reduced the unemployment claims.
Williams warns that after a period of contraction, new monthly or quarterly figures are being compared to prior periods of collapsing activity. "Improvements" are thus artifacts of the prior collapse and not signs of economic rebound.
The "Birth-Death Model" is used by the Bureau of Labor Statistics to estimate the net of the non-reported jobs lost by failed businesses
(deaths) and new jobs created by start-up companies (births). Williams explains why the model understates job loss during periods of contraction. The modeling on which the birth-death adjustment is based consists primarily of periods of economic growth when there are more non-reported start-up jobs than non-reported job losses from business failures. The BLS model came up with a monthly adjustment of 75,000 new jobs added to the reported number. That means an adjustment factor of 900,000 new jobs added to the reported payroll jobs number each year.
However, during economic contraction, such as the current one, it is wrong to assume that new start-ups are creating 75,000 jobs each month more than are being lost to business failures. Thus the job losses are understated by the 900,000 upside birth-death adjustment and by the absence of a downside adjustment to estimate the jobs lost as a result of failed companies that cease to report.
The reported unemployment rate is itself deceptive as it no longer includes discouraged workers who have been unemployed for more than a year. These long-term discouraged workers are simply erased from the rolls of the unemployed.
Consumer confidence typically is swayed by "good news" hype. The drops in the Conference Board's and the University of Michigan's measures of consumer confidence in July suggest that Americans are becoming inured to recovery hype and are realizing that the government and the media lie about the economy just as they lie about everything else.