Washington Post Runs Another Front Page Editorial About the Deficit

Dean Baker keeps speaking the truth to power, and the power keeps ignoring him.--SS

Washington Post Runs Another Front Page Editorial About the Deficit:

The Washington Post used a front page, above the fold article, to complain that Congress and President Obama had not done as much as it would have liked to reduce the deficit. Every person interviewed for the piece shared the complaint. The piece did not present the views of a single person pointing out that more progress on deficit reduction could have led to even more unemployment than what the country is already experiencing.

Nor did the Post present the views of anyone pointing out the fact that the deficit is large because the economy collapsed. The article likely led readers to believe that the country has large deficits because we have out of control spending or massive tax cuts. Anyone with access to the Congressional Budget Office's projections knows that the deficits would have been relatively modest in the last few years had it not been for the downturn caused by the collapse of the housing bubble.

It is remarkable that the Post never makes this point in its budget reporting. Of course, mentioning this fact would call attention to its unbelievable level of incompetence in ignoring the housing bubble. While the Post devoted endless and editorial space to the modest deficits of the bubble years, it completely ignored the growth of the housing bubble that eventually sank the economy and caused the large deficits of the present.

Nor did it present the views of anyone applauding the fact that the Super Committee failed in its efforts to cut Social Security and Medicare. The Super Committee, a group with a guarantee of a special fast-track vote on its budget proposal, has been a longstanding dream of the many groups funded by Wall Street investment banker Peter Peterson. The fact that they finally realized this dream and were able to do nothing with it is very noteworthy. Many people around Washington and across the country applauded this failure as a great victory. Their views should have been presented in the article.

The article includes several other misleading or simply false statements. In the latter category are several references to proposals from Simpson-Bowles deficit commission. This commission produced no proposals. The co-chairs, former Senator Alan Simpson and Morgan Stanley director Erskine Bowles, produced a proposal, however this proposal was not approved by the commission.

The piece also includes several comments to the effect that Social Security and Medicare will break the budget. In fact, Social Security's costs are rising very gradually. Furthermore, its projected benefits are fully paid for through the year 2038 with no changes whatsoever in the program. Even after that date, if Congress does not change the law, Social Security cannot contribute to the deficit. It would only be able to pay out about 80 percent of scheduled benefits (roughly 10 percent more than the average benefit received by today's retirees).

Every budget analyst knows that the real source of the country's projected long-term deficit problem is the projection that health care costs in the United States will continue to explode. However this fact was never mentioned in the article.