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Government finances — in denial

Today’s newspapers brought some astonishingly sad news about the state of economic education. David Leonhardt writing in the New York Times (The Gridlock Where Debts Meet Politics) is picked up in the Dallas Morning News under the better title “Voters won’t do the math.” The point being made in the articles is that there is simply not enough money in the system to pay pension and healthcare benefits for retirees. People — Republican presidential candidates? –  are simply not doing the math. One could say that people are not being told the truth. But when it comes to not telling the truth the story told in “The Denials that Trapped Greece” by Landon Thomas Jr. and Stephen Castle is borderline frightening. They begin by telling how a report on the problems that Greece was facing was prepared at the IMF back in mid-2009 — and was suppressed by Greece. The denials continued from there and apparently continue to today. On the subject of math, Ezekiel J. Emanuel’s “Less Than $26 Billion? Don’t Bother” in the New York Times is an eye opener on the proposed solutions to the Medicare problem that do nothing. Forget drug company profits, medical malpractice, importing drugs from Canada. None of them make more than a 1% difference to the bill. We wait for next week’s installment when the “real” solution will be presented.

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