Between the TARP and the stimulus, we’ve added an enormous amount to the national debt recently. So it’s no surprise that I’ve heard from a lot of people who are worried about the situation. How are we going to finance all this debt? Aren’t we risking a dollar crisis? A huge run-up in interest rates?

These are all reasonable questions, but as Peter Goodman writes in The New York Times, the answer is no and the world can’t get enough of our Treasury bonds. Instead, the debt crisis is hitting elsewhere, especially Eastern Europe: “as Americans eschew foreign deals and keep their dollars at home, and as foreign central banks — especially China — buy Treasury bills, the United States is absorbing money that used to be scattered around the globe. And that is making money tighter elsewhere in the world.”

In a sense, we seem to have cycles from a dot-com bubble to a U.S. real estate bubble to a brief commodities bubble and now to a U.S. Treasuries bubble. Which all seems a little perverse. But it also bolsters the case for additional stimulus or a massively expensive bank nationalization scheme. We’re well-below full employment, and under the circumstances the way you know you’re doing too much stimulating is that the borrowing is pushing interest rates up. At the moment, that’s not happening.

The World Bank is now projecting that worldwide GDP will shrink in 2009, the first time that’s happened since World War II.

When thinking about economic distress, it’s important to try to distinguish between levels and rates of change. By all accounts, the economy in China is going to be healthier than the economy in the United States. Which is to say that China will have a higher rate of growth. But China is still a dramatically poorer country than the United States. And it’s going to be in poor countries like China where a downturn is truly painful. Those are also the places where you’re most likely to see economic crisis turn into really serious political crisis. And of course bad as the Great Depression was, the downturn itself wasn’t nearly as terrible as its political consequences—the rise of Nazism and the outbreak of World War II.

The Chas Freeman saga continues with the publication of the following letter in The Wall Street Journal:

A number of statements have appeared objecting to the appointment of Ambassador Charles “Chas” Freeman as head of the National Intelligence Council based on his political views (“Obama’s Intelligence Choice,” by Gabriel Schoenfeld, op-ed, Feb. 25). We, the undersigned former U.S. ambassadors, have known Chas Freeman for many years during his service to the nation in war and peace and in some of our most difficult posts. We recognize that Chas has controversial political views, not all of which we share. Many individuals with strong and well-known views have, and are being asked, to serve in positions of high responsibility.

The free exchange of political views is one of the strengths of our nation. We know Chas to be a man of integrity and high intelligence who would never let his personal views shade or distort intelligence assessments. We categorically reject the implication that the holding of personal opinions with which some disagree should be a reason to deny to the nation the service of this extremely qualified individual. We commend President Obama and Admiral Dennis C. Blair for appointing Ambassador Freeman to such an important position.

The authors are Thomas Pickering (ambassador to Jordan, then Nigeria, then El Salvador, then Israel, then the United Nations, then India, then Russia before serving as Undersecretary of State for Political Affairs) and Ronald E. Neumann (Ambassador to Algeria and Bahrain who George W. Bush made Ambassador to Afghanistan) and is also signed by Samuel W. Lewis (various ambassadorships and head of Policy Planning at State), Ronald Spiers, Nicholas A. Veliotes, Brandon Grove, William C. Harrop, Robert E. Hunter, Thomas D. Boyatt, Roscoe S. Suddarth, Harry G. Barnes, Jr, Avis Bohlen, Howard B. Schaffer, Edward M. Rowell, Robert V. Keeley, James R. Jones, and Patricia Lynch-Ewell.

I would say that the letter, along with the fact that Admiral Blair tapped Freeman in the first place, reflects the fact that a broadly realist orientation is pretty widespread among military, intelligence, and diplomatic professionals.

The need to change the clocks twice a year to accommodate Daylight Savings Time is unquestionably annoying. But it’s alleged to save energy. But does it? Matthew Kotchen and Laura Grant of University of California at Santa Barbara say no in “Does Daylight Saving Time Save Energy? Evidence from a Natural Experiment in Indiana”. The abstract:

The history of Daylight Saving Time (DST) has been long and controversial. Throughout its implementation during World Wars I and II, the oil embargo of the 1970s, consistent practice today, and recent extensions, the primary rationale for DST has always been to promote energy conservation. Nevertheless, there is surprisingly little evidence that DST actually saves energy. This paper takes advantage of a natural experiment in the state of Indiana to provide the first empirical estimates of DST effects on electricity consumption in the United States since the mid-1970s. Focusing on residential electricity demand, we conduct the first-ever study that uses micro-data on households to estimate an overall DST effect. The dataset consists of more than 7 million observations on monthly billing data for the vast majority of households in southern Indiana for three years. Our main finding is that—contrary to the policy’s intent—DST increases residential electricity demand. Estimates of the overall increase are approximately 1 percent, but we find that the effect is not constant throughout the DST period. DST causes the greatest increase in electricity consumption in the fall, when estimates range between 2 and 4 percent. These findings are consistent with simulation results that point to a tradeoff between reducing demand for lighting and increasing demand for heating and cooling. We estimate a cost of increased electricity bills to Indiana households of $9 million per year. We also estimate social costs of increased pollution emissions that range from $1.7 to $5.5 million per year. Finally, we argue that the effect is likely to be even stronger in other regions of the United States.

I say: scrap it. Something approximating real time is good enough.

Via Steve Benen, John Cole has a chart that puts Barack Obama’s economy-destroying tax cuts in their proper context:

As we can see here, the United States has enjoyed three periods of prosperity over the past 100 years—there was the late-1920s, the late 1980s, and the 2000s. For the rest of our history, the entire period from FDR through to early Reagan, and then again in the dark days of Bill Clinton, we suffered from cataclysmic stagnation because “soak the rich” policies left businesses without incentive to invest. Our talented citizens unfortunately, but understandably, dediced to “go Galt” en masse and the economy stagnated.

And yes, please pay no attention to the fact that the three periods of ultra-low taxes were followed by a budget crisis (Reagan) and catastrophic global economic collapse (Coolidge-Hoover, Bush).

Justin Fox has an updated chart comparing job losses in percentage terms in the most recent six recessions. We’ve now surpassed the 1981–82 recession and, I think, thereby qualify ourselves for true “everything is terrible” status. On the other hand, the 81-82 recession came hot on the heels of the brief 1980 recession so in some ways we may still be neck-in-neck with early eighties-style badness.

That said, one other thing the chart illustrates is that things may be worse than that sort of comparison would indicate. The past two recessions haven’t been especially severe in terms of the lows plumbing the depths, but they’ve been very long in job market terms. Much more U-shaped than V-shaped. It’s particularly noteworthy than the 2001 recession was extremely brief in GDP terms, but the jobs effects lingered on forever. Insofar as the length/severity ration of labor market downturns is increasing over time for real reasons, that could indicate a jobs situation that stays bad for an extremely long time—much worse than in 81–82 even if we don’t fall that much further before bottoming out.

Indeed, the employment to population ratio never regained its dotcom-era high point during the most recent upswing, so in a sense this is all part of a much larger and bigger employment depression.