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That’s undoubtedly what readers are asking after seeing this strange and inaccurate phrase appear yet again in an article about the latest tax plan Speaker Boehner put forward. Of course it is inaccurate since it implies that debt and deficits have been out of control.
As every budget analyst knows, deficits were actually quite modest until the economy plummeted in 2008 following the collapse of the housing bubble. The deficit in 2007 was just 1.2 percent of GDP. The economy can run deficits of this size forever, since the debt to GDP ratio was actually following. The deficit was projected to remain low for the next several years until the projected expiration of the Bush tax cuts pushed the budget into surplus in 2012.
Source: Congressional Budget Office.
The Post has consistently misrepresented the nature of current deficits. This helps to promote its agenda of cutting Social Security and Medicare.
The Post also misrepresented the risks of missing the December 31 deadline of reaching a budget deal. It told readers:
“If no action is taken before the end of the year, taxes will rise for nearly 90 percent of taxpayers in January, potentially sparking a new recession, according to many economists.”
In fact it is not clear that any economists say that missing the deadline will cause a recession. The Congressional Budget Office and others have projected that if the higher tax rates and spending cuts remain in place all year that the economy will likely fall into a recession. They did not say that this would be the result of waiting one or two weeks into January to work out a deal.
Most analysts think that President Obama’s negotiating position will improve after the tax cuts expire. If this is the case then trying to maintain pressure on President Obama to reach a deal before the end of the year would also advance the Post’s agenda for cutting Social Security and Medicare.
Dean Baker is co-director of the Center for Economy and Policy Research. He also writes a regular blog, Beat the Press, where this post originally appeared.
7 Comments
plenty of monai for the foreign banks…great printing biz
http://www.zerohedge.com/article/exclusive-feds-600-billion-stealth-bailout-foreign-banks-continues-expense-domestic-economy-
I am embarrassed to admit it, but I actually lingered on “Morning Joke” for around 15 minutes this morning. (Approximately the same sort of twisted fascination as watching a trainwreck occur in real time.) In attendance were (among others) Bob Woodward, Mrs. Greenspan, Chuck Todd, Al Hunt, an apparently mute person who goes by the name of Mika Brzezinski, and, of course, Mr. Logorrhea himself, Joke Scarborough.
To say that these people are deeply misguided would be the most charitable understatement. What bothers me even more, however, is that there is a certain segment of the population, both inside and outside the beltway, who assimilate this fatuous claptrap as though it were holy writ. That’s a problem.
I hope your recovery from this event is Painless, I could never do this by myself and if I ever did it would be the buddy system;)
Adrenaline shot straight to the heart followed by a few shocks from the defibrillator brought me right around. (Clear!) This was in no way helpful in terms of the mental scarring which was inflicted, however. Years of therapy will undoubtedly be required for that part…
I was arguing with a right-winger about contribution of Bush’s tax cuts to today’s mess and he referred me to this piece that claims that the tax cuts actually helped the economy. I replied that we also had the housing bubble at the time, creating fake “prosperity” and that economies tend to go up anyway if nothing gets in their way. Whadday’all think? Does he have a point or do the factors I’ve named cancel out his assertion?
I differ with you a bit, Dean, in that I think the “pressure on Obama” is all kabuki. He WANTS to cut social security, Medicare and Medicaid. But the theatre gives him some “they made me do it” cover.
Be that as it may, I’m currently in Washington DC, and one of the tv stations is running a non-stop “count-down clock” to the “fiscal cliff.” [They even call it "Cliff Notes," with an entertaining yellow and black graphic.] Talk about drumming up the hysteria and pressure!!
I’m encouraging everyone I know to write, e-mail or phone their representatives, demanding that they RESIST this thievery, and reminding those folks that while Obama won’t be on the ballot in 2014, they will, and we’ll remember.
Yeah, the “pressure on Obama” is bullshit.
Like Jane said yesterday and backed up with fact after fact after face, “I don’t know why Obama wants to cut Social Security. I do know that Obama has been honest about it from the start.”
I admit Obama being “honest about it” might be charitable because it does seem as though he wants folks to believe that he’s somehow being forced into this or is doing this merely as a compromise on the fiscal cliff negoitations rather than him doing it because he wants do it.