Wednesday, April 29, 2009

Is there an epidemiologist in the house?

Word is now out that swine flu started spreading at least two weeks before the first confirmed case on April 13th.NYT: From Édgar, 5, Coughs Heard Round the World Key passages from the story
The government has identified Édgar as the first person in Mexico to have become infected with a virulent strain of swine flu, a notoriety that could raise questions about how Mexican officials reacted — or failed to react — to the early stages of what might become a global epidemic.

Édgar was one of hundreds of people in La Gloria who came down with flulike symptoms in an outbreak that federal officials say began March 9.
What was the result?
In La Gloria, a town that has a major pig farming industry, two children died of the flu in March and early April, though the authorities said they had yet to determine whether it was the same strain that infected Édgar and spread widely to other locales. That and other questions have left residents here unnerved and confused.
We don't know how many of these people had this strain because it seems that only Edgar's sample was actually saved for testing, but Occam's Razor suggests that we are talking about one bug spreading. Now it is true that the local authorities didn't agree, at least not initially. Swine flu's ground zero? Residents say nearby farm
The people in this town of 3,000 high in the Veracruz mountains believe their community is ground zero for the swine flu epidemic, even if health officials deny it.
The town is home to Mexico's earliest confirmed case of swine flu, a 4-year-old boy who was among more than 450 residents who complained of respiratory problems. They blame contamination spread by pig waste at nearby breeding farms co-owned by a U.S. company. But the company says it found no sign of swine flu on its farms, and Mexican authorities haven't determined how or where the swine flu outbreak began.
As early as February, residents began complaining of unusually strong flu symptoms. They blamed a farm that lies upwind, five miles (8.5 kilometers) to the north. By late March, roughly one-sixth of the community of 3,000 began suffering from severe respiratory infections.
Local health officials and Federal Health Secretary Jose Angel Cordova downplayed claims that the swine flu epidemic could have started in La Gloria, noting that of 30 mucous samples taken from respiratory patients there, only 4-year-old Edgar Hernandez's came back positive. That confirmation that the boy's virus was H1N1 — a strange new mix of pig, bird and human flu virus — wasn't made until last week, when signs of the outbreak elsewhere prompted a second look at his sample.
Cordova insists the rest of the community had suffered from H2N3, a common flu.
So lets break this down. Starting in February up to 450 out of 3000 inhabitants were suffering from severe flu symptoms, suggesting that even more were infected with a milder version. In any event we have something is is obviously quite contagious but not notably deadly. This is somewhat confirmed by the fact that reports are coming in from around the world that people returning from tourist trips to Mexico are showing signs of the disease but in almost all cases a relatively mild version. Plus it seems that they picked this up in many different parts of Mexico, for example the NY kids were in Cancun.

All of which suggest this possibility, first hinted at by Sanjay Gupta a couple of days ago, that the flu is already an epidemic throughout Mexico but relatively few are dying of it. A couple of days ago there were 81 fatalities, today that is up to 149. But Mexico City has 20,000,000 people. If we take La Gloria as our template we have 15% of the people with severe symptoms with 2 of those 450 having died. Suggesting a mortality rate among the infected of 0.5%. 15% of 20,000,000 equals 3 million people with severe symptoms. 0.5% of that is 15000. Yeah that is a big number but is just 1 in 1333 inhabitants.

There is a hell of a lot of uncertainty here. We have no idea of how many people have been exposed to what. But it is at least possible that almost everyone in Mexico has been exposed and that only in the biggest cities are the fatality numbers big enough to notice. Anyway the next few days should tell, if the mortality numbers flatten then we might conclude we are actually on the downward path of a not that deadly flu epidemic, while if the numbers start rising we may be on the brink of disaster. But if it all turns out better tha

Wednesday, April 15, 2009

Draft for AB

by Bruce Webb
(For some reason I am having problems getting this saved over at AB so I will just try to publish it here. The piece is incomplete as is, the parts that are not quite ready have been placed in italics)

In the course of a post called the The Vanishing Surplus-Revealed I made some claims that the promoters of this claim were using a novel sense of 'surplus'. Well it turned out that this sense was not really novel, it had indeed been used for certain technical purposes. Still I maintain there was an intent to deceive. And to explain why I propose to revisit the concepts of 'surplus' 'deficit' and 'debt' as normally used in reporting intended for the public. I fully expect this discussion to result in a flame war, those who find such things distasteful are urged to just move on. On the other hand I believe there is some value added by clarifying the issue. So you can with Dante at the Gates of Hell accept the consequences of 'Abandon All Hope Ye Who Enter Here' and follow me below the fold. Or take the more prudent advice of 'Move Along Folks, Nothing to See'. Your choice.

What does it mean when we say that a current year deficit adds to the Federal debt as in 'CBO projects Obama budgets will add $3 trillion more in debt by 2019 than the Adminstration projected in February"? Or what are they talking about when Congress periodically talk about raising the debt limit? Well it turns out to not that simple. The simplest measure of national debt is that given us by the U.S. National Debt Clock whose most famous version is seen in Times Square. This version summarizes the debt situation as follows
The Outstanding Public Debt as of 15 Apr 2009 at 05:13:40 PM GMT is:
The estimated population of the United States is 306,006,590
so each citizen's share of this debt is $36,525.02.
The National Debt has continued to increase an average of $3.84 billion per day since September 28, 2007!
Concerned? Then tell Congress and the White House
This is what I am calling 'Headline' Debt, it is this measure that you will see in the headlines and in coverage of the Tea Baggers. On the other hand if you go to the Treasury's Debt to the Penny you will a more complex view. At the close of business April 13th, total Public Debt stood at $11,169,978,555,115.48. But this breaks down to two components, Debt held by the Public at $6.893 trillion and Intragovernmental Holdings at $4.276 trillion. This in turn breaks down as follows. (chart from Wiki)

First thing of note, the OAS, DI, HI, SMI Trust Funds all are treated separately. Second note interest on those Trust Funds ARE counted as Public Debt, the $2.203 trillion shown as OAS debt in the chart above equating exactly to the year end balance and assets respectively in the following two balance sheet from the Dec. 2008 Montly Trust Fund Report.

(Note too that the second balance sheet showed $0 in "Interest receivable" while the second showed that of $52.95 billion in interest earned year-to-date fully $52.85 billion was credited in December leaving only $100 million credited in Oct and Nov. Meaning you can't just pick any month of the year and draw conclusions, in total context only June and Dec are meaningful.)

So 'Public Debt' as reported on the Debt Clock includes total Trust Fund balances including interest earned as of Dec 2008. The Trust Funds are thus included in what I am calling 'Headline debt'. How does that relate to 'Headline surplus/deficit'?

Well Movie Guy directs us to this from Michael Boskin . Sense and Nonsense About Federal Deficits
and Debt
and quotes it as follows (bolding mine)
"To make sense of these issues, economists employ several related measures in addition to the traditional nominal cash budget balance (see Table 1)."

Table 1
Alternative Budget Surplus/Deficit Concepts

1. Unified nominal surplus/deficit = nominal revenues – nominal outlays; “headline” numbers
2. Operating surplus/deficit = unified deficit – net investment (public capital investment - depreciation of public capital)
3. Primary surplus/deficit = unified deficit – interest outlays on inherited debt
4. Cyclically adjusted surplus/deficit: unified deficit adjusted to “high employment,” i.e., removes effect (+ and – ) of business cycle on revenues and outlays; i.e., removes effect of “automatic stabilizers”
5. Standardized surplus/deficit: adjusts unified deficit for business cycle and some other transitory items, e.g., the inflation component of interest, receipts from allies for Desert Storm, deposit insurance outlays for failed S&Ls, that are unlikely to affect real income
Meaning that the 'traditional' 'headline' surplus/deficit is the Unified Surplus/Deficit which includes 'net interest' and NOT the Primary Surplus/Deficit which excludes it and seems limited to technical discussions as opposed to those aimed at the pubilic.

When CBO released its March 2009 Preliminary Analysis of the Presidents Budget it was explicitly explained as an increase in the 'deficit' of an extra $2.3 trillion dollars over the $6.9 trillion predicted by OMB for 2009 to 2019. And not a single AB critic discounted that increase for the amount actually due to a DECREASE in projected interest on the Trust Funds. First the tables:
CBO March


This is where it gets hard. For Unified Budget purposes Social Security surpluses including interest show up as Revenue in the current year and so to that degree offset somewhat General Fund deficits. On the other hand they also show up as Public Debt

What do we have so far? Well I have shown that Trust Fund interest shows up in Public Debt which is also what most people think of as 'Federal Debt' (as in Debt Clock). It is thus part of 'Headline Debt'.also shows up in

And there is a similar situation when it comes to 'debt'. I'll turn this over to Peter Orszag
How much does the federal government owe? It might seem like a simple question to ask those of us wearing the green eyeshades, but there are lots of different concepts used to answer it. For example, at the end of fiscal year 2008:
Debt held by the public net of financial assets— the measure I find to be most meaningful — stood at $5.3 trillion (37 percent of GDP).
Debt held by the public was equal to about $5.8 trillion (41 percent of GDP).
Gross debt equaled $10.0 trillion (70 percent of GDP).
What do each of these concepts represent?

Let me proceed in reverse order, and begin with gross debt. Gross debt has two components: debt held by the public—which I will discuss more in a moment— and intragovernmental debt. Intragovernmental debt is, essentially, debt that the government owes to itself—as of the end of last year, it totaled $4.2 trillion. The majority of this debt is issued to the Social Security Trust Fund, and most of the remainder is issued to other trust funds, such as the Civil Service Retirement and Medicare Trust Funds. These trust funds are required to invest their surpluses in government bonds. While the federal government will certainly make good on the IOUs issued to these trust funds, they should not be counted when assessing the financial state of the federal government as a whole.
. Yet most commenters do use Gross debt as the proper measure. Orszag again (bolding mine)
One branch of the government issuing debt to another branch may make one branch poorer relative to the other branch—but it does not affect the overall financial state of the government. For example, when I tell my daughter and son that I owe them each $10 for their allowances, I am poorer, and they are richer—as a family, though, there is no change in our overall finances. That’s why the Congressional Budget Office, the Office of Management and Budget (including under the prior administration), and the Government Accountability Office all agree that gross debt is not a meaningful metric for assessing the government’s current fiscal position. Yet, the world being what it is, this number is quoted often.
Now it is just a fact that both Unified Budget surplus/deficit and Gross debt each include interest on the Trust Funds

Now there is an argument that it SHOULD be the one so used for example we have this from Orszag at OMB

They are not wrong in doing so because when OMB and CBO scores the effect of those spending proposals they explicitly confine themselves to that measure. For example here is Table S-1 from the Presidents Feb Budget proposal.

Which we could compare to CBO's March 2009 OASDI Baseline

In each case when they use the term 'deficit' they take that by subtracting 'Outlays' from from 'Receipts' "headline" number.
To which we could compare CBO's August 2008 The Budget and Economic Outlook: Fiscal Years 2008 to 2018

In this Table CBO breaks it down a little differently, instead of taking total receipts and subtracting total out lays they take On Budget deficit/surplus and add it to Off-Budget deficit/surplus to produce overall 'deficit/surplus'.


Monday, April 13, 2009

Fred Hiatt's Wise Men

Yep absolutely no interest groups or partisan elements from a plan proposed by four retired generals and admirals (one each from the Air Force, Army, Navy and Coast Guard), a former Secretary of the Army (West) and perhaps the biggest Democratic Defence Hawk since Scoop Jackson and John Stennis died (Scoop has a Ballistic Missile Sub named after him, Stennis has an Aircraft Carrier, what are the odds that Nunn is going to blow his chances for his own ship by proposing big cuts in defence spending in the interest of a balanced budget?) Lets see how is this group filled out? Well we have two more past Congressional defence hawks with Hagel and Hamilton . Plus I see a bunch of Bush 1 & 2 cabinet level officials (Brock, Hills, Pickering, Ridge, Sullivan) and in a blast from the past Ed Meese. Now Dr. Jackson served in the Clinton Administration as head of the Nuclear Regulatory Administration and Newton Minnow came out as an early Obama supporter but taken as a whole this group goes from the Center to the Right and has very strong ties to the Military-Industrial complex. Which is Hiatt's world fully qualifies them to be the 'Wise Men'.

Sunday, April 05, 2009

Trust Fund Operations and Assets

This table shows actual assets in the OAS Trust Fund, It is in support of a new post over at Angry Bear. See you there.

Wednesday, April 01, 2009

Trust Fund Monthly Reports: Jan-Feb

Okay we have a DI Trust Fund whose assets went from $217.2 billion at the end of January to $216.2 billion at the end of February, a deficit of a $1 bn. Similarly we have an OAS Trust Fund whose assets went from $2.228 trillion to $2.237 trillion, a surplus of $9 bn. If we add the January numbers we have a starting combined balance of $2.445 trillion and if we add the February ones we get $2.453 trillion for a total surplus of $8 billion for the month.

Now compare that to the numbers in the following post at Notes on Social Security Reform Slowdown Slashes Social Security Surplus where he shows DI going from $216.2 billion at the end of Feb to $214.4 billion, a deficit of $1.8 billion and OAS going from $2.219.0 trillion to $2.219.5 trillion, for a surplus of $500 million. Which totals out to $2.434 trillion down a net $1.25 billion for the month.

Now his numbers are not made up, they come from a different section of the documents that supplied the Tables. So how can the same data set show a combined surplus of $8 billion in one place and a combined deficit of $1.25 billion somewhere else? Well on inspection it seems the answer is in the line item "Interest Receivable'. In the case of DI it went up from $907 million to $1.7 billion, in the case of OAS it went up from $9.2 billion to $17.4 billion in each case totally explaining the differences.

So maybe some of the hype surrounding 'Vanishing surpluses' needs to be put on hold.