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Home Publications Blogs Beat the Press Good News for Italy: NYT Says Its National Debt Is Just $2.6 Billion

Good News for Italy: NYT Says Its National Debt Is Just $2.6 Billion

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Thursday, 11 July 2013 04:39

The folks in Italy must be pretty happy. After years of being forced to worry about deficits the NYT told readers:

"Faced with record unemployment and a public debt of more than €2 billion, or $2.6 billion, the grand coalition was already under pressure for the slow pace of its reforms."

That would be great news since the NYT's numbers imply that Italy's debt is just over 0.1 percent of GDP. According to the IMF, Italy's debt is more than 2.0 trillion euros, more than 130 percent of GDP.

Of course the numbers in the NYT are a mistake. It wrote "billions" when it meant "trillions." This sort of thing can happen, but it does raise the question of why the NYT thought it was clever to write "trillions" rather than write 130 percent of GDP. While a reporter or editor should have recognized the typo in writing billions, it is almost inconceivable that someone would not have recognized the typo if the paper had written that Italy had a debt of 0.1 percent of GDP.

It is worth noting that this is not the first time that a mistake like this has made its way into print or at least cyberspace in the NYT. Just a few weeks ago a NYT article told readers that food stamps are a $760 billion program. That might have surprised the small group of readers familiar with actual spending on the program, since the correct number is $76 billion for 2013. (The NYT did subsequently correct this mistake.)

The point is not just to mock the NYT for what are in fact egregious errors. (Sorry, missing the size of Italy's debt by three orders of magnitude is pretty bad.) The point is why on earth is it a standard in budget reporting to express budget figures in numbers that are apparently meaningless even to the people who write them, when they could very easily be expressed as percentages that would be meaningful to the vast majority of readers.

Almost all NYT readers would understand that the food stamp program in 2013 is roughly 1.8 percent of the budget. Almost none know what it means to spend $76 billion on the program. If the point is to inform readers, then the paper would express the number in percentage terms, end of story. The only reason to express numbers as dollar (or euro) amounts is to mindlessly follow a fraternity ritual. (This is what budget reporters do.)

It is understandable that people who want to promote confusion about the budget -- for example convincing people that all their tax dollars went to food stamps -- would support the current method of budget reporting. It is impossible to understand why people who want a well-informed public would not push for changing this archaic and absurd practice.

 

Addendum:

The NYT corrected the number around 10:00 P.M. on the 11th.

Comments (10)Add Comment
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written by Last Mover, July 11, 2013 7:17

No kidding. Overheard in a big box store recently in response to excessive rain and flooding, paraphrased:

"I'm worried about what's going to happen when this is all over. This can't continue. Eventually we are going to run out of rain and there won't be any left for later."

Amazing how a media fixated on zero-sum austerity myths hyped with scary absolute numbers can shape the public mind.
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written by David, July 11, 2013 7:30
The order-of-magnitude error probably comes from the archaic British use of billion to mean what we in the U.S. call trillion. Indeed many Europeans used milliard for our billion to avoid ambiguity, but most have now knuckled to American usage. Some reporter or editor was stuck in old ways. See http://en.wikipedia.org/wiki/1,000,000,000 Your broader point stands, of course.
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written by Ryan, July 11, 2013 9:09
Generally, I think it happens when the intent is to scare and confuse. Here, I think it's laziness, obliviousness, or cluelessness. But never fear; in 10 or so years, as the LOL generation goes into reporting, the sentence will read "..of more than €2 billion, or $2.6 BILLIONZ!!!"
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written by RobertP, July 11, 2013 11:03
Apparently selling newspapers is more important than a well-informed public.

You R Right, Again
written by James, July 11, 2013 11:05
Yes, it would had been easier to detect if it showed debt totaled 0.1% of GDP. This, however, lead to a second and more important point that the major media have broadcasting our country need more math and engineering major.

They also said a lot of jobs go unfilled bc we lack those math majors.

Well, NYT clears shows there is a lack of math skills there.

They don't have the math skills to do division and percentage like taking the numerator and divide that by a denominator.

Next time before lecturing us how poorly educated the country is, they should take an online class first.
...
written by Shaun Peterson, July 11, 2013 12:03
Funny. I have actually heard people throw around the notion that Food Stamps cost close to a Trillion dollars a year and I always wondered where they got that figure from. Of course, it's conservatives that do that, driving the point home that if the New York Times is worried about it then it must be a crisis. Like duh.
In one sense it doesn't matter
written by Jennifer, July 11, 2013 1:02
Whether it is a billion or trillion the NYT would probably still claim if Italy cut more it would see more growth
New game--guess how long will it take for the NYT to fix the error?
written by David M, July 11, 2013 4:07
It's still there as of 3:00 Central.
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written by watermelonpunch, July 12, 2013 12:13

@ Last Mover:
Amazing how a media fixated on zero-sum austerity myths hyped with scary absolute numbers can shape the public mind.

I think the problem is caused because this zero sum thing is often applied willy-nilly & inappropriately, both by the media, and because of government policies which distort things.

Some things are regarded as rare that are not, and things that are finite & rare are regarded as plentiful.

I wonder if the Library at Alexandria or Inca road runners were so full of shit as the internet & legislation.
Maybe its the same reason economists think budget % are meaningful?
written by Perplexed, July 12, 2013 2:09
-"The point is why on earth is it a standard in budget reporting to express budget figures in numbers that are apparently meaningless even to the people who write them, when they could very easily be expressed as percentages that would be meaningful to the vast majority of readers.

Almost all NYT readers would understand that the food stamp program in 2013 is roughly 1.8 percent of the budget."

To some degree I get the % of GDP inference but since economists go along with the ruse of not including tax expenditures, monopoly profits, and other government give-aways in budgets, I don't see how the % of budget numbers are at all meaningful when applied to food stamps. In fact, its quite the opposite. While they may appear as a very large 1.8% of the budget, they're really a much tinier fraction of total government "handouts." Why is it that economists don't start with gross taxes due under the law and then show "tax expenditures" as the expenses they are, and then add monopoly profit taxes as well (which like all rents, never make it into the stats. at all). Then the public could see the entire picture of what % food stamps represent of all government welfare.

How is it that "We the People" can possibly be self governing when economists can't even tell us what the real government expenses are, and what % of the GDP is rents? What other CEO, CFO, or board of directors would put up with such obfuscation and out right refusal to provide these crucial measurements?

So we're left with assuming its "marginal products" and watching the wealth and income concentrate as our only option? Maybe its time we brought in physicists and mathematicians to develop appropriate measures that can be used to actually govern?

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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