First the CBO tells us that Social Security Trust Fund reserves will continue growing after 2018 and now the GAO writes that today’s fiscal policy is unsustainable. Just as the President leaves town to promote his Social Security plans, these analysts commit unforgivable acts (as in telling the public the truth).

How big will the US’s current account (CA) deficit be in 2005? The best forecasts of the CA deficit for 2005 are in the neighborhood of $750-$800bn. That would be roughly consistent with the pace that the US ran during the end of 2004. But because of an interesting paradox that exists about the 2005 […]

In a piece in the next issue of The Economist, Brad Setser nicely explains the risks of a potential yuan revaluation against the dollar: According to Brad Setser, a former Treasury official now at the University of Oxford, a dearer yuan would have a more significant effect on capital flows. At the moment, foreign capital […]