James Pethokoukis helpfully tweets an abysmal new economic forecast from Goldman Sachs:

In Obamaland these may be alarm bells, but if the rest of Pethokoukis's tweets are any indication, Republicans hear them as the bells of Christmas in July. Unfortunately, they understand the lessons of political science forecasting models all too well, so while it would be nice if conservatives would let us do something about this grim news instead of just standing cynically athwart the economy and yelling Stop, it's not going to happen. After all, there's an election coming up, and the worse off you are, the better off they are.

So suck it up, folks. There's no relief in sight.

Hooray! One of my favorite pet peeves is in the news again. It's the infamous — and endlessly debunked — 8x8 rule, namely that adults should be sure to drink at least 8 glasses of water per day. I got interested in this several years ago because I'm a human camel: I don't drink anywhere near that much water and I feel fine. So I wondered where this myth came from. Answer: after undoubtedly prodigious research, Heinz Valtin of Dartmouth concluded a decade ago that it most likely came from a single paragraph in an obscure government report in 1945. Here it is:

A suitable allowance of water for adults is 2.5 liters daily in most instances. An ordinary standard for diverse persons is 1 milliliter for each calorie of food. Most of this quantity is contained in prepared foods.

Note two things: First, this is based on no actual research at all. It's just a casual guess. Second, even if it's true, it was misinterpreted. Everyone read the first sentence, which suggests that a 2000-calorie diet requires 2000 ml of water, or roughly 64 ounces. But they sailed right by the second sentence, which says that you get a lot of this automatically in the food you eat. So even if this was good advice, it really meant something like five or six glasses of water per day, not eight or more.

So how much water should you drink? Answer: as much as you want. If you're thirsty, drink some water. If you're not, don't bother. And "water" includes coffee, tea, soft drinks, and pretty much any other water-based beverage. Water with caffeine in it is just as good as water without it.

So why am I writing about this yet again? Because I'm amused by the fact that every couple of years someone rediscovers this myth, looks into it, and publishes a journal article debunking it. Valtin wrote about water requirements in 2002, the Institute of Medicine tackled the subject in 2004, and in 2008 Dan Negoianu and Stanley Goldfarb published a comprehensive piece in the Journal of the American Society of Nephrology concluding that for normal, healthy people there's no evidence one way or the other that drinking lots of water has any health benefits. It doesn't clear your kidneys of toxins, it doesn't improve organ function, it doesn't help you lose weight, it doesn't prevent headaches, and it doesn't improve your skin tone. (On the other hand, it doesn't do any harm, either. If you're thirsty, feel free to drink some water.)

But that was three years ago, so it's time for another go-around. Jen Quraishi has the latest debunking today, reporting on a piece by Margaret McCartney in the current issue of the British Medical Journal. This time, though, there's a brand new source of dubious hydration nonsense to be debunked: the bottled water industry:

While McCartney didn't see evidence backing up the 2-liter-a-day rule, she did see bottled water companies pushing the "water=health" idea to sell more of their products. As McCartney wrote on her blog: "The bottled water industry is pushing the idea that we should drink more than we normally would with the promise of health benefits, and I don’t think there are any. That's all. And I would recommend tap rather than bottled water: cheaper, and far better for environment." The bottled water companies were not happy with McCartney's attitude. In response, the European Federation of Bottled Waters wrote a letter to BMJ about McCartney's article and cited a recommendation that "at least two liters of water should be consumed per day."

McCartney, in fact, goes even further than other researchers I've read: according to Jen, "she found evidence that mental performance suffers when people drink more water than they're thirsty for." So take it easy on the Big Gulps, OK?

On the left, Domino is surveying her domain. The entire living room below is hers, all hers. On the right, my spy cam ferrets out Inkblot in his new favorite place. Normally, he spends morning nap time on our bed, but for the past week he's been camping out in a dark hidey hole underneath the guest bed instead. Don't ask me why. Occasionally a stray neuron fires and he suddenly decides he adores some new and different place. Next week it might be the bathtub. After that, who knows?

Here's an interesting chart via Paul Krugman. Atif Mian and Amir Sufi compared the strength of economic recovery on a county-by-county basis, and what they found was that virtually all of the continuing weakness is concentrated in areas where household debt is high. Consumption of durable goods is low, residential investment is low, and employment is low. Their conclusion:

Overall, the county evidence strongly suggests that credit demand is weak because of an overleveraged household sector....The evidence is [] consistent with the view that problems related to household balance sheets and house prices are the primary culprits of the weak economic recovery. King (1994) provides a detailed discussion of how differences in the marginal propensity to consume between borrowing and lending households can generate an aggregate downturn in an economy with high household leverage....Our view is that the depth and length of the current recession relative to previous recessions is closely linked to the tremendous rise in household debt that preceded it.

This isn't an easy problem to solve, but a couple of things leap out. First, high household debt is strongly correlated with underwater mortgages, and this could be partly addressed by a more aggressive program of loan modifications to replace the hapless HAMP program of 2009. Second, temporary tax cuts that put money in people's pockets are useful even if the money doesn't get spent. We won't get a full recovery until debt levels get back to normal, and the faster that happens the better. If tax rebates get used to pay off credit cards or mortgages, that's fine.

The strange conservative jihad against energy efficient light bulbs continues today. Higher efficiency standards were mandated by the Energy Independence and Security Act of 2007, a bill passed by massive majorities in Congress and signed into law by President George W. Bush, but no matter. The Rush Limbaugh crowd has turned it into a poster child for socialism run amok, and repealing it is now a top priority among among the tea party crowd. Here's Stephen Moore in the Wall Street Journal today:

The light bulb ban was part of the 2007 energy bill. It will outlaw the sale of traditional 100 watt bulbs starting in 2012. Many Americans dislike the new fluorescent bulbs, which give off less heat and are more energy efficient, because they don't like the quality of the lighting.

Nope. Traditional bulbs will continue to be available. They'll just be more efficient. As Stephen Lacey tells us, Philips brought new, higher efficiency incandescent bulbs to market several months ago:

It’s not just Philips making these bulbs. GE and Sylvania are also producing new, energy-efficient incandescents using the same technology. And by 2014, consumers will not be forced to buy more expensive LEDs or moderately priced CFLs — they’ll be able to buy incandescent bulbs that today cost $1.42 and use 27% less energy.

The table on the right shows the new standards. (Details here.) Basically, the new bulbs produce the equivalent of 100 watts of light output using only 72 watts, the equivalent of 75 watts using only 53 watts, etc. And they're still incandescent, and they still provide the same kind of light you're used to. If you don't like CFLs, you're free to continue not to use them.

Repeal of the EISA standards failed earlier this week, but the tea partiers aren't giving up. It just passed on a voice vote in the House as an amendment to an appropriations bill, all based on the myth that incandescent bulbs have been banned and you'd better stockpile them quick before the EPA jackboots march into your local hardware store and haul them all away. But it's not true. You can still buy incandescent bulbs. They'll just be more energy efficient.

Felix Salmon posts this chart from a recent Basel report and repeats the familiar observation that "it wasn’t an excess of greed and speculation which led to the financial crisis, but rather an excess of overcaution, with an attendant surge in demand for triple-A-rated bonds." True enough: everyone wanted super safe investments, so Wall Street cranked out boatloads of allegedly super safe investments. As the Basel report states, "Between 1990 and 2006, the year in which the series of ABS issues peaked, assets with the highest credit rating rose from a little over 20 per cent of total rated fixed-income issues to almost 55 per cent." (That's the heavy green line in the chart.)

But I think this misses the point a bit. The problem is that the Basel report cherry-picks its timeframe. Try this instead: "Between 1994 and 2006, assets with the highest credit rating rose from about 47 per cent of total rated fixed-income issues to almost 55 per cent." That doesn't seem quite so scary. But surely that's a better timeframe to use since global issuance of fixed income securities was pretty negligible before that.

What is scary in this chart is the huge growth of debt in general over the past two decades, and in particular the boom in ABS debt during the aughts, which tripled between 2000 and 2006. These are the CDOs and structured products that fueled the housing boom, and there's not much question that most of them should never have been allowed to join the AAA hit parade. They're largely gone now, but unfortunately, Felix points out what's next:

Finally, look at the way that the maroon bars — structured products, basically — have given way to a scarily large purple bar at the far right of the chart. That’s sovereign debt, and it tells you all you need to know about where the next crisis is likely to come from.

The share of debt rated AAA may be only modestly higher now than it was in the late 90s, but it still strains credibility to believe that half the debt in the world is truly AAA — i.e., essentially completely free of credit risk. The world just isn't that safe a place.

From influential RedState editor and CNN analyst Erick Erickson, advising House Republicans to reject President Obama's compromises on raising the debt ceiling limit:

Obama has a legacy to worry about. Should the United States lose its bond rating, it will be called the “Obama Depression”. Congress does not get pinned with this stuff.

OK then. I guess a massive new depression is fine as long as Obama gets stuck with the blame. It's heartwarming to see such concern for the working families of the country, isn't it?

But then, Erickson's also one of the guys who continues to be under the impression that Congress has banned incandescent light bulbs. How many people are going to have to point out that this is untrue before conservatives finally get the message?

Interstate 405 ("the 405") in Los Angeles, California.

Midnight tonight marks the beginning of Carmageddon in Los Angeles: For two days and five hours, Interstate 405 between I-10 and US 101 will be completely shut down. Since the 405—and yes, we always use "the" in front of our freeway numbers in Southern California—is the main artery between Los Angeles and the San Fernando Valley, everyone expects total chaos as drivers jam up every available alternate route into the city (and into LAX, which is, inconveniently, located right on the 405). City and transit officials are treating this about the same way they'd treat a tsunami warning, telling residents in increasingly apocalyptic tones to either leave town or else just stay inside for the duration. Their message, broadcast across every medium known to science for the past two months, is pretty simple: Don't even think about taking your car anywhere if you live within a 30-mile radius of the construction.

So what's the reason for this mind-boggling closure? Answer: Caltrans is adding a 10-mile northbound car-pool lane to the freeway. The Los Angeles Times' architecture critic, Christopher Hawthorne, has some questions about this:

To begin with: Is widening the 405 (to add one solitary carpool lane on the freeway's northbound side) really something that we should be spending $1 billion on? Will it actually make traffic through the pass better? And if so, for how long?

After all, study after study has shown the ineffectiveness of this approach. As soon as you open up new lanes, drivers adjust: A few more decide to take the newly widened route each day, and before long the congestion is just as bad as before.

In this case, because an HOV lane is being added, some of the change in behavior will be virtuous, turning drivers into passengers. It's still tough to think of a less cost-efficient way to spend a billion dollars of public money.

Actually, it might be even worse than Hawthorne thinks. For the past two decades Los Angeles has gone on a binge of increasingly expensive car-pool construction, but the benefits of these new lanes are surprisingly equivocal. The lanes are always additions to freeways (no previously existing lane has been converted for car-pool use since the Santa Monica diamond lane debacle of 1976, which set back car-pool lanes by a decade), so they always ease traffic for a while. But as Hawthorne points out, the phenomenon of "traffic generation" has been known for decades. More lanes just attract more drivers and more congestion.

What's more, although it's true that car-pool lanes carry more passengers than general purpose lanes, this is a meaningless statistic. If all of a freeway's existing car-pools move into a newly constructed HOV lane, all you've done is juggle the traffic around. In fact, since HOV lanes generally have lower capacities than multiuse lanes (thanks to the "snail" effect, which is exactly what it sounds like), you actually lose some overall traffic capacity.

But here's the worst news. What we really want to know is how many drivers are motivated by HOV lanes to form new car pools. Surprisingly, though, considering the thousands of miles of HOV lanes constructed in the United States over the past two decades, this is a hard number to get a handle on. There have been a few studies of new car-pool formation, however, and here's one of them from Caltrans showing the number of car pools on LA freeways over the past 20 years:

The good news is that HOV lane construction during the '90s appears to have genuinely spurred more carpooling. True, adding 25,000 new car pools doesn't seem like much for a region the size of the LA basin with hundreds of miles of freeways, but at least it's measurable progress. The bad news is that despite the billions of dollars spent since then, new car-pool formation during the past decade has been...zero. All that money seems to have had no effect on car-pool behavior at all. Nor is this limited just to Los Angeles. Pravin Varaiya of the University of California's PATH program came to the same conclusion for the Bay Area's HOV lanes in a 2007 study. Over both the near and long term, the shorter commute times of HOV lanes apparently has almost no effect on the willingness of drivers to form car pools. What's more, census data suggests this is a nationwide phenomenon. "Over time the attraction of HOV travel appears to be weakening," Varaiya concludes.

None of this should be taken as a definitive takedown of car-pool lanes. The data on their effectiveness is murky, to say the least, and a lot depends on where the lanes are built and how well they support bus traffic. But that murkiness is surprising all by itself considering the HOV spree the country has been on over the past two decades. Even after 20 years of nonstop construction, we still don't really know how effective HOV lanes are at promoting car pools.

For Angelenos, however, the news is almost certainly bad. For starters, the I-405 shutdown is going to produce two rounds of chaos (the second one coming at the end of the project). And the project is sucking up a billion dollars that could almost certainly be used more efficiently on other transit projects. But that's the least of it. If Caltrans' own chart is to be believed, LA's willingness to carpool was saturated over a decade ago. Adding another billion dollars in new HOV lanes won't produce even a single new car pool. Now that's Carmageddon.

Plus even Hitler doesn't like it. And he's the guy who built the autobahns.

So is China in a housing bubble? In a recent paper, Christian Dreger and Yanqun Zhang say yes:

Our results indicate the presence of a house-price bubble. In Figure 1 it can be seen that increasing imbalances have emerged over the past two years. For example, real house prices in Shanghai have been 28% above the long run equilibrium in 2008, and 35% in 2009. While the evidence is similar for Beijing, the increase is more spectacular in Shenzhen....In general, the bubble is more pronounced in the special economic zones and the south-eastern coastal regions. Overall, the size of the bubble is 20% in 2008 and 25% in 2009, regardless of whether GDP or population weights are applied.

If their numbers are correct, the Chinese housing bubble isn't as bad as the American housing bubble of the aughts. What's more, it's not fueled by borrowing as strongly as ours was. And what's even more, Chinese borrowing has largely been to buy actual property, not to finance home equity loans.

All of these things together suggest that China's property bubble might not be that bad. On the other hand, it's pretty bad in certain areas, and if the Chinese economy starts to go south it could touch off a vicious cycle of slowing domestic demand and plummeting house prices. It's still something to keep an eye on.

From Benjy Sarlin:

Republican lawmakers are pushing President Obama to put seniors, troops, and bondholders at the front of the line should Congress fail to raise the debt ceiling. The rest? Well, that's up to him.

....But where will the immediate 44% cut in overall spending needed to avoid default come from instead? Michele Bachmann, who has gone so far as to demand the debt ceiling never be raised, dodged questions on the issue Wednesday by simply repeating her assertion that Social Security and troop pay be left sacrosanct.

Asked by TPM about what areas might need to be cut offset their proposed guarantees, Rep. Nan Hayworth (R-NY) offered a similar response, repeating that Social Security, Medicare, military pay, and veterans' benefits should all be off limits. Pressed to name any savings — furloughing federal employees, shutting down various agencies — that might be preferable, she said her focus was only on calling out Obama's threats.

Let's take a brief look at the numbers. The federal government is scheduled to spend about $300 billion in August. Something like $125 billion of that is debt. So if the debt ceiling doesn't get raised, the government can only spend about $175 billion. Very roughly, here's spending for the month of August in the areas Nan Hayworth says are off limits:

Social Security = $60 billion
Veterans benefits = $10 billion
Medicare/Medicaid = $70 billion
Interest payments = $20 billion
Military pay = $15 billion

Total = $175 billion

So there you have it. Nan Hayworth is right: we can fund all of these things without raising the debt ceiling. Unfortunately, that's it. There's really no other prioritizing necessary. There's not a single dollar left for any other function of government. Not defense spending, not the FBI, not foreign embassies, not the court system, not prisons, not disaster relief, not unemployment insurance, not the border patrol, not TSA or the FAA, not roadbuilding, not maintenance of any kind, not national parks, and not pensions for retired federal workers. Not anything. And aside from military personnel, every single employee of the federal government will have to be furloughed.

That's what Nan Hayworth and Michele Bachmann and the rest of the tea party folks apparently want. Quite the small government utopia, isn't it?