In an analysis of the fiscal cliff deal David Leonhardt told readers that:
“Having won this round, Democrats still have compromises to offer Republicans in the next one, like changes to Social Security.”
Actually Democrats, or at least progressive Democrats, are not concerned about “changes” to Social Security, they would be very happy with an increase in benefits, especially for lower income retirees. Democrats are worried about “cuts” to Social Security. It is amazing that the NYT refuses to make this fact clear to its readers.
This piece also inaccurately asserts that:
“In the 2008 campaign, Mr. Obama said that his top priority as president would be to “create bottom-up economic growth” and reduce inequality. He has governed as such.”
This is at best debatable. President Obama bailed out the big Wall Street banks, allowing them to get trillions of dollars in loans at below market interest rates. This massive subsidy allowed many of the richest people in the country to preserve their wealth when market forces left to themselves almost certainly would have put most of the major banks out of business.
Obama has also refused to make a reduction in the value of the dollar a top goal in trade policy. A lower valued dollar would create millions of new manufacturing jobs by making U.S. goods more competitive in the world economy. This would provide a strong boost to labor demand and wages.
Obama has also pushed trade agreements that have a main goal of increasing patent and copyright protections. This will lead to more rents going to drug companies, software companies and the entertainment industry, raising prices for consumers. He also has done nothing to reduce the protectionist barriers that allow doctors in the United States to earn twice as much as their counterparts in other wealthy countries, pushing up health care costs to consumers by $80 billion a year.
Of course President Obama has also embraced the absurd claim that reducing the deficit is a top priority, abandoning the route of economic stimulus, even though he knows that the large current deficits are entirely the result of the economic downturn caused by the collapse of the housing bubble.
Looking at a longer list of Obama administration policies, it is very difficult to support the claim that he has governed in a way that promotes the middle class.
In an analysis of the fiscal cliff deal David Leonhardt told readers that:
“Having won this round, Democrats still have compromises to offer Republicans in the next one, like changes to Social Security.”
Actually Democrats, or at least progressive Democrats, are not concerned about “changes” to Social Security, they would be very happy with an increase in benefits, especially for lower income retirees. Democrats are worried about “cuts” to Social Security. It is amazing that the NYT refuses to make this fact clear to its readers.
This piece also inaccurately asserts that:
“In the 2008 campaign, Mr. Obama said that his top priority as president would be to “create bottom-up economic growth” and reduce inequality. He has governed as such.”
This is at best debatable. President Obama bailed out the big Wall Street banks, allowing them to get trillions of dollars in loans at below market interest rates. This massive subsidy allowed many of the richest people in the country to preserve their wealth when market forces left to themselves almost certainly would have put most of the major banks out of business.
Obama has also refused to make a reduction in the value of the dollar a top goal in trade policy. A lower valued dollar would create millions of new manufacturing jobs by making U.S. goods more competitive in the world economy. This would provide a strong boost to labor demand and wages.
Obama has also pushed trade agreements that have a main goal of increasing patent and copyright protections. This will lead to more rents going to drug companies, software companies and the entertainment industry, raising prices for consumers. He also has done nothing to reduce the protectionist barriers that allow doctors in the United States to earn twice as much as their counterparts in other wealthy countries, pushing up health care costs to consumers by $80 billion a year.
Of course President Obama has also embraced the absurd claim that reducing the deficit is a top priority, abandoning the route of economic stimulus, even though he knows that the large current deficits are entirely the result of the economic downturn caused by the collapse of the housing bubble.
Looking at a longer list of Obama administration policies, it is very difficult to support the claim that he has governed in a way that promotes the middle class.
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Yes, it is so frustrating that President Obama keeps missing the opportunity to whack the elderly. Of course fans of arithmetic know that the story of projected long-term budget deficits is the broken U.S. health care system. If we paid the same amount per person for our care as people in other wealthy countries we would be looking at long-term surpluses, not deficits. And, if we can’t fix our health care system because groups like the pharmaceutical industry and the doctors are too powerful, we could always go the route of trade to take advantage of lower costs elsewhere. Unfortunately, public policy is dominated by protectionists like Samuelson, who obstruct such trade. But these political obstacles do not change the truth. The budget problem is health care, health care and health care.
Yes, it is so frustrating that President Obama keeps missing the opportunity to whack the elderly. Of course fans of arithmetic know that the story of projected long-term budget deficits is the broken U.S. health care system. If we paid the same amount per person for our care as people in other wealthy countries we would be looking at long-term surpluses, not deficits. And, if we can’t fix our health care system because groups like the pharmaceutical industry and the doctors are too powerful, we could always go the route of trade to take advantage of lower costs elsewhere. Unfortunately, public policy is dominated by protectionists like Samuelson, who obstruct such trade. But these political obstacles do not change the truth. The budget problem is health care, health care and health care.
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Those who hoped that one of the new year’s resolutions at the Post would be more honest budget reporting would be disappointed by today’s paper. While this budget piece starts off well with a headline about taming the threat from the debt ceiling and high unemployment, the expression “tame the debt” appears twice on the second page. While it does note that the projected rise in health care costs is a major cause of the projected deficits, it does not note that it is really the only cause. It also would have been helpful to point out that the only reason for the large deficits that we are now seeing is the economic downturn caused by the collapse of the housing bubble.
Those who hoped that one of the new year’s resolutions at the Post would be more honest budget reporting would be disappointed by today’s paper. While this budget piece starts off well with a headline about taming the threat from the debt ceiling and high unemployment, the expression “tame the debt” appears twice on the second page. While it does note that the projected rise in health care costs is a major cause of the projected deficits, it does not note that it is really the only cause. It also would have been helpful to point out that the only reason for the large deficits that we are now seeing is the economic downturn caused by the collapse of the housing bubble.
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Some of us didn’t take the skills deficit seriously, but David Brooks shows us that it is a real problem. Apparently the New York Times cannot find a conservative columnist who can deal with basic issues of logic and arithmetic. Brooks is very upset because the budget deal apparently does not include any cuts in Medicare.
He also is very angry that so many people insist on relying on arithmetic and pointing out that the “$1 trillion” deficits are almost entirely due to the economic downturn caused by the collapse of the housing bubble and not some fundamental imbalance of taxes and spending. He scoffs:
“They have found that the original Keynesian rationale for these deficits provides a perfect cover for permanent deficit-living.”
Wow, those damn math nerds!
On the more fundamental question of the long-term deficit projections that have Brooks so excited, fans of arithmetic keep pointing out, to Brooks’ frustration and anger, that it is all due to our broken health care system. If our per person health care costs were comparable to those in Germany, Canada, or any other wealthy country we would be looking at huge budget surpluses in the future, not the enormous deficits that have Brooks so excited.
Serious people therefore talk about fixing our health care system. (Trade is one possible route, although committed protectionists like Brooks apparently never even consider it.) In fact, recent cost numbers suggest that we may already be on the right track. But Brooks doesn’t look at numbers. He is really angry because the public doesn’t want to suffer and politicians who want to keep their jobs are not anxious to make them suffer.
It’s best to let Brooks tell the story himself:
“Ultimately, we should blame the American voters. …
“Most members of Congress are responding efficiently to the popular will. A large number of reactionary Democrats reject any measure to touch Medicare or other entitlement programs. A large number of impotent Republicans talk about reducing the debt, but are incapable of forging a deal that balances tax increases with spending cuts.”
Some of us didn’t take the skills deficit seriously, but David Brooks shows us that it is a real problem. Apparently the New York Times cannot find a conservative columnist who can deal with basic issues of logic and arithmetic. Brooks is very upset because the budget deal apparently does not include any cuts in Medicare.
He also is very angry that so many people insist on relying on arithmetic and pointing out that the “$1 trillion” deficits are almost entirely due to the economic downturn caused by the collapse of the housing bubble and not some fundamental imbalance of taxes and spending. He scoffs:
“They have found that the original Keynesian rationale for these deficits provides a perfect cover for permanent deficit-living.”
Wow, those damn math nerds!
On the more fundamental question of the long-term deficit projections that have Brooks so excited, fans of arithmetic keep pointing out, to Brooks’ frustration and anger, that it is all due to our broken health care system. If our per person health care costs were comparable to those in Germany, Canada, or any other wealthy country we would be looking at huge budget surpluses in the future, not the enormous deficits that have Brooks so excited.
Serious people therefore talk about fixing our health care system. (Trade is one possible route, although committed protectionists like Brooks apparently never even consider it.) In fact, recent cost numbers suggest that we may already be on the right track. But Brooks doesn’t look at numbers. He is really angry because the public doesn’t want to suffer and politicians who want to keep their jobs are not anxious to make them suffer.
It’s best to let Brooks tell the story himself:
“Ultimately, we should blame the American voters. …
“Most members of Congress are responding efficiently to the popular will. A large number of reactionary Democrats reject any measure to touch Medicare or other entitlement programs. A large number of impotent Republicans talk about reducing the debt, but are incapable of forging a deal that balances tax increases with spending cuts.”
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Steve Rattner had a series of mostly useful charts in the NYT this morning describing the state of the economy. The major exception is the one on Social Security shown below.
It is not clear what information this chart is supposed to convey. The average annual benefit in 2012 for a retired worker was $14,760 according to the Social Security Administration. It’s not clear where Rattner got $23,135. The chart also shows adopting a chained CPI, presumably for adjusting the annual cost of living adjustment, would have led to a 4.0 percent cut in benefits by 2011. This is a considerably larger cut than is usually estimated, since the change would only apply to benefits after retirement.
It is also not clear why anyone would use median income (not defined) as a reference point. The point of Social Security is to protect retirees from economic fluctuations like the severe downturn caused by the collapse of the housing bubble. While more competent economic policy would have provided more protection to workers also, we have Social Security because we recognize that retirees have fewer options to boost their income (i.e. work more) than the working age population. Also, since the chart purports to show averarge benefits it would be more reasonable to at least include average income.
This piece also inaccurately refers to the report from the Bowles-Simpson commission. There was no report from the Bowles-Simpson commission since no plan received the necessary majority support.
Steve Rattner had a series of mostly useful charts in the NYT this morning describing the state of the economy. The major exception is the one on Social Security shown below.
It is not clear what information this chart is supposed to convey. The average annual benefit in 2012 for a retired worker was $14,760 according to the Social Security Administration. It’s not clear where Rattner got $23,135. The chart also shows adopting a chained CPI, presumably for adjusting the annual cost of living adjustment, would have led to a 4.0 percent cut in benefits by 2011. This is a considerably larger cut than is usually estimated, since the change would only apply to benefits after retirement.
It is also not clear why anyone would use median income (not defined) as a reference point. The point of Social Security is to protect retirees from economic fluctuations like the severe downturn caused by the collapse of the housing bubble. While more competent economic policy would have provided more protection to workers also, we have Social Security because we recognize that retirees have fewer options to boost their income (i.e. work more) than the working age population. Also, since the chart purports to show averarge benefits it would be more reasonable to at least include average income.
This piece also inaccurately refers to the report from the Bowles-Simpson commission. There was no report from the Bowles-Simpson commission since no plan received the necessary majority support.
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In his year-end report Chief Justice John Roberts bizarrely complained about the “fiscal cliff” and the national debt, wrongly asserting that:
““No one seriously doubts that the country’s fiscal ledger has gone awry.”
Of course everyone familiar with budget data knows that the reason that deficit exploded was the economic downturn caused by the collapse of the housing bubble. It would have been appropriate for the NYT to present the views of an economic expert who could have pointed out that Justice Roberts clearly does not understand the economy or the budget.
In his year-end report Chief Justice John Roberts bizarrely complained about the “fiscal cliff” and the national debt, wrongly asserting that:
““No one seriously doubts that the country’s fiscal ledger has gone awry.”
Of course everyone familiar with budget data knows that the reason that deficit exploded was the economic downturn caused by the collapse of the housing bubble. It would have been appropriate for the NYT to present the views of an economic expert who could have pointed out that Justice Roberts clearly does not understand the economy or the budget.
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That is the gist of his column today. He presents some evidence that the gap in costs between the United States and the developing world, most importantly China, has been reduced and therefore jobs are coming back to the United States. It’s very hard to understand the negative in this story. It could mean that a trade deficit that was leading to ever more foreign indebtedness is beginning to moderate. It’s not clear why this would be bad.
The complaint is especially ironic coming from Samuelson, who has long been very upset about government budget defiits in the United States.It is difficult to imagine a scenario where the budget deficit moves closer to balance that does not also involve the trade deficit moving closer to balance. The only alternative way to make up for the demand lost to the trade deficit would be with negative private sector savings.
That is the gist of his column today. He presents some evidence that the gap in costs between the United States and the developing world, most importantly China, has been reduced and therefore jobs are coming back to the United States. It’s very hard to understand the negative in this story. It could mean that a trade deficit that was leading to ever more foreign indebtedness is beginning to moderate. It’s not clear why this would be bad.
The complaint is especially ironic coming from Samuelson, who has long been very upset about government budget defiits in the United States.It is difficult to imagine a scenario where the budget deficit moves closer to balance that does not also involve the trade deficit moving closer to balance. The only alternative way to make up for the demand lost to the trade deficit would be with negative private sector savings.
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The NYT doesn’t seem to keep up to date with writings on the budget deficit even in its own paper. As I have often pointed out, the large budget deficits of recent years are entirely attributable to the plunge in the economy caused by the collapse of the housing bubble. Paul Krugman has recently been harping on this point in his NYT column and blog. For this reason, its news story claiming that:
“Years of increased spending on everything from wars to expanded entitlement programs — combined with protracted, stubborn unemployment and a nation of workers whose earning power and home values have plummeted in recent years — have persuaded lawmakers in both parties that fiscal policy is the most pressing domestic concern.”
Of course the “years of increased spending” would be beside the point if it were not for the economic downturn. The NYT badly misled its readers in making this assertion.
The article also misled readers in the next sentence which asserts:
“But a fundamental ideological chasm between the majority of lawmakers and an empowered group of Congressional Republicans — fueled by some Tea Party victories in both chambers in 2010 — has made it more difficult than ever to reach fiscal and budgetary compromises.”
Actually, the vast majority of Tea Party backers agree with the vast majority of Democrats in their opposition to cuts in Social Security, Medicare, and Medicaid. The main difference is that the Tea Party backers seem to believe that there is some other area of government spending, other than defense, that can be cut back to reduce or eliminate the budget deficit. Of course this is not true. However the nature of the gap between most Democrats and Tea Party backers is informational, not ideological.
This makes the position of Republicans in Congress especially difficult. They need to produce spending cuts, but not in the programs that the Tea Party backers support and often depend upon. Since this is not possible, it makes the politics very hard for them.
The NYT doesn’t seem to keep up to date with writings on the budget deficit even in its own paper. As I have often pointed out, the large budget deficits of recent years are entirely attributable to the plunge in the economy caused by the collapse of the housing bubble. Paul Krugman has recently been harping on this point in his NYT column and blog. For this reason, its news story claiming that:
“Years of increased spending on everything from wars to expanded entitlement programs — combined with protracted, stubborn unemployment and a nation of workers whose earning power and home values have plummeted in recent years — have persuaded lawmakers in both parties that fiscal policy is the most pressing domestic concern.”
Of course the “years of increased spending” would be beside the point if it were not for the economic downturn. The NYT badly misled its readers in making this assertion.
The article also misled readers in the next sentence which asserts:
“But a fundamental ideological chasm between the majority of lawmakers and an empowered group of Congressional Republicans — fueled by some Tea Party victories in both chambers in 2010 — has made it more difficult than ever to reach fiscal and budgetary compromises.”
Actually, the vast majority of Tea Party backers agree with the vast majority of Democrats in their opposition to cuts in Social Security, Medicare, and Medicaid. The main difference is that the Tea Party backers seem to believe that there is some other area of government spending, other than defense, that can be cut back to reduce or eliminate the budget deficit. Of course this is not true. However the nature of the gap between most Democrats and Tea Party backers is informational, not ideological.
This makes the position of Republicans in Congress especially difficult. They need to produce spending cuts, but not in the programs that the Tea Party backers support and often depend upon. Since this is not possible, it makes the politics very hard for them.
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A WSJ article told readers that the “fiscal cliff” has already caused damage to the economy. The piece began:
“The damage may already be done.
“Even if lawmakers manage to avoid most of the $500 billion in tax increases and spending cuts set to take effect this week, the risks to the U.S. economy have risen as consumers and investors recoil from Washington’s latest budget spectacle.”
That ain’t what the data show. The piece trumpets the plunge in consumer confidence in December, while noting in passing:
“The research group (the Conference Board) said Americans’ outlook for the economy ‘plummeted’ despite a positive view about current economic conditions.”
Of course it is only the current conditions index that bears any relation to consumer spending. The expectations index is driven primarily by news reporting, like hysterical accounts of the implications of the fiscal cliff. It has virtually no relationship to spending.
Contrary to the implication of this piece, the Commerce Department reported that investment in capital goods, excluding aircraft, was up 2.7 percent in December and 3.2 percent in November, suggesting little concern about the fiscal cliff. While the stock market has been down somewhat in recent weeks, short-term fluctuations in the market have almost no meaning for the economy.
In short, we should all appreciate the WSJ’s efforts to hype the fiscal cliff, but they should place them on the fiction page.
A WSJ article told readers that the “fiscal cliff” has already caused damage to the economy. The piece began:
“The damage may already be done.
“Even if lawmakers manage to avoid most of the $500 billion in tax increases and spending cuts set to take effect this week, the risks to the U.S. economy have risen as consumers and investors recoil from Washington’s latest budget spectacle.”
That ain’t what the data show. The piece trumpets the plunge in consumer confidence in December, while noting in passing:
“The research group (the Conference Board) said Americans’ outlook for the economy ‘plummeted’ despite a positive view about current economic conditions.”
Of course it is only the current conditions index that bears any relation to consumer spending. The expectations index is driven primarily by news reporting, like hysterical accounts of the implications of the fiscal cliff. It has virtually no relationship to spending.
Contrary to the implication of this piece, the Commerce Department reported that investment in capital goods, excluding aircraft, was up 2.7 percent in December and 3.2 percent in November, suggesting little concern about the fiscal cliff. While the stock market has been down somewhat in recent weeks, short-term fluctuations in the market have almost no meaning for the economy.
In short, we should all appreciate the WSJ’s efforts to hype the fiscal cliff, but they should place them on the fiction page.
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