March 23, 2013
It’s apparently hard to find out about the state of the U.S. economy in the nation’s capital. That is the only way to explain the fact that in their articles on the budget passed by the Senate last night, neither the NYT or Washington Post said one word about how the budget would affect the economy over the next decade.
This one should have been pretty basic and simple. As tens of millions of graduates of intro economics classes know, GDP is equal to the sum of consumption, investment, government spending and net exports. Currently, annual GDP is close to $1 trillion below its potential according to the estimate from the Congressional Budget Office because private sector demand plunged following the collapse of the housing bubble.
While conservative politicians run around yelling mumbo jumbo about making the job creators happy, there is no plausible story that private sector demand will rise enough to fill this gap any time soon. That means that government has to fill the gap by running large deficits. Its failure to do so has meant that the economy is down almost 9 million jobs from its trend growth path and millions of people are needlessly suffering from unemployment.
However, neither the NYT or Post could be bothered mentioning the millions who are suffering unemployment as the direct result of government policy. Instead the NYT told us in the first sentence that the budget will:
“trim spending gingerly and leave the government still deeply in the debt a decade from now.”
Yes, that is important for readers to know — by the NYT’s criteria the country will be “deeply in debt” a decade from now. What ever happened to the distinction between news and opinion pages?
Of course the Post was much worse. The Post was good enough to give a comparison with the budget put forward by House Budget Committee Chairman Paul Ryan and approved by the House last week. It told readers that in contrast to the $18 trillion debt from the Senate budget, the Ryan budget would have the debt top out at $14 trillion. It didn’t bother to mention that the spending cuts in the Ryan budget will leave millions more unemployed. But hey, probably no one important would get the ax.
The Post also continued its crusade to gut Social Security and Medicare telling readers that:
“Obama has been busily courting Republicans, mostly in the Senate, with the promise that Democrats would back a more moderate path to deficit-reduction that pairs roughly $600 billion in new revenue with nearly $1 trillion in spending cuts, including structural changes to Medicare and Social Security, by far the most expensive federal programs.”
Actually President Obama has not put forward any “structural changes” to Social Security. He has proposed cuts, as in reduced benefits, as in lower monthly checks, as in less money to high-living seniors. The Post knows that cuts to Social Security are incredibly unpopular with the public so it routinely uses euphemisms to help politicians who support such cuts try to conceal their agenda.
It is also worth noting that neither paper mentioned the Senate’s approval by voice vote of the Sanders’ Amendment. This amendment explicitly opposes the cut to Social Security that would result from shifting the basis for the annual cost of living adjustment to the chained CPI. This change would reduce the annual adjustment by 0.3 percentage points leaving benefits 3 percent lower after ten years, 6 percent lower after twenty years and 9 percent lower after thirty years. The average cut in benefits would be roughly 3 percent over a typical worker’s retirement.
It might have been worth mentioning that not one member of the Senate, either Democrat or Republican, was prepared to stand up in support of this proposal that has been pushed both by President Obama and the Washington elites more generally. But, pointing out this fact might have undermined the agenda of the elites who support this cut.
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