The Financial Markets Agree With President Obama and Disagree with Paul Ryan

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Monday, 28 January 2013 06:00

It probably would have been useful to remind readers that Representative Paul Ryan's claim that country is facing a fiscal crisis is sharply at odds with the views of market participants in a NYT article reporting on his latest interview. The article quotes Ryan:

"I don’t think that the president thinks that we actually have a fiscal crisis, ... He’s been reportedly saying to our leaders that we don’t have a spending problem, we have a health care problem. That just leads me to conclude that he actually thinks we just need more government-run health care.”

Of course the fact that investors are willing to lend the U.S. government trillions of dollars for long periods of time for interest rates of less than 2.0 percent indicates that the markets do not believe the United States has a fiscal crisis. Also, it is a fact that if the United States had per person health care costs that were at all comparable to those in other wealthy countries that it would be looking at long-term budget surpluses, not deficits.

It would have been worth reminding readers that Mr. Ryan has no evidence to support his assertions that the United States somehow has a fiscal crisis or that fixing our health care system would not address its projected long-term deficit problem. Readers might be mistakenly led to believe that Ryan's position has a basis in reality.