Deficit Nonsense in the WSJ
Jonathan FBD Weisman strikes again. I blame Kevin Drum for the fact that I read a grossly dishonest article of his in the Wall Street Journal. The article is about public attitudes on the deficit and on proposed solutions. As a normal journalist, Weisman stresses anecdotes and only briefly mentions polling data.
I list episodes of what I consider journalistic malpractice after the jump.
The headline (not written by Weisman) contrasts with the text (written by Weisman or quotes chosen by Weisman). The headline is “Voters Back Tough Steps to Reduce Budget Deficit.” It isn’t that unusual for headlines to contradict the stories they head, but usually the evidence quoted in the article supports the article and not the headline. Weisman manages the extraordinary accomplishment of presenting a less valid summary of the data he considered and wrote about than someone who just skimmed his article and wrote a few words under extreme time pressure.
After (finally quoting polls) Weisman hands the mike over to Gary C Peters to allow him to contradict the polling data (presented immediately above in Weisman’s contribution to journamalism).
“Folks want to cut the deficit, but they say, ‘Don’t touch my Social Security. Don’t touch my Medicare. Don’t cut defense spending, and don’t raise my taxes,”‘ said Rep. Gary C. Peters (D, Mich.), another member of the House budget-cutting task force. “This is going to take courage.”
The data presented by Weisman in the paragraph immediately above say otherwise
the most recent Wall Street Journal/NBC News poll. In it, 74% said it would be acceptable to change Medicare to provide larger subsidies for low-income seniors, while cutting subsidies for the more affluent. Sixty-four percent would accept capping Medicare and Medicaid payments to health-care providers,
Now one might interpret the cutting subsidies for the more affluent as meaning “more affluent than me” but capping payments to providers is exactly how the ACA restrains the growth of Medicare spending. This is definitely a tough measure, and is definitely going to touch everyone’s medicare. Either the poll is invalid or Peters is totally wrong. Notably, capping payments to healthcare providers was exactly the hugest issue in US politics this Spring, with massive opposition. The Republican party made its stand against exactly that. They also denounced the individual mandate after supporting it for decades (and inventing the idea) and I assume they opposed eliminating the Medicare advantage boondoggle which they introduced, but their key issue, the one that put them ahead in the polls, is opposition to capping Medicare and Medicaid payments. Also notably most Americans opposed those provisions of the ACA which most now support when a tiny bit of detail is added. Weisman, however, pretends to have completely forgotten the whole health care reform debate.
He also allows Peters to argue that politicians will have to go against public opinion to balance the budget. I think that before making such a claim, Peters would have to check what would happen if the social security tax were charged on all income and the Bush tax cuts for the rich were allowed to expire. Both policies have majority support (Just above the Peters quote Weisman notes “58% backed subjecting incomes over $107,000 to Social Security taxes.” I don’t know if he means “wage and salary incomes” since Social Security taxes are currently charged on wage and salary income not income, but hey I can’t expect a WSJ correspondent to know the difference can I ?).
I think any remaining deficit would be small enough that the debt to GDP ratio would shrink. Now this sure isn’t going to happen. There is no way that Congress (or Obama) will accept elimination of the FICA ceiling. This shows the problem is the exact opposite of that alleged by Peters. The majority of Americans are willing to do what it takes to control the national debt (doing it to rich people). Congress and the President are not willing.
The nonsense Peters quote is the second to last paragraph in the article. The last paragraph is much more bizarre
Still, veterans of the budget wars see one reason for optimism in the subtle shifts in public opinion. Unlike politicians, most Americans don’t seem to place partisan blame on one party or another, so neither party can claim the high ground. “There’s no end in sight, and it’s both parties,” said Dani Saunders, 31, a conservative independent who keeps the books for her husband’s Richmond tattoo parlor.
I don’t see why this is a reason for optimism. It seems that ballance has become such a central priority that it is considered grounds for optimism about the deficit that blame is assigned roughly equally. I mention in passing that the evidence of the views of most Americans is a statement by a self declared conservative. It seems to me that Weisman considers the word “seems” to give him the result to make up claims of fact.
More importantly, given the deficit reducing measures acceptable to the majority, any rational person would predict lower deficits if most Americans blamed the Republicans. Republicans fought restraints on compensation of health care providers like death (panels). Republicans certainly won’t raise taxes on rich people. The only way the deficit will be brought under control is if the Democrats have a larger majority than their current majority. That is, there are no grounds for optimism.
Further up, Weisman exposes his gross blatant contempt for facts in other ways. He wrote “And complicating matters for Democrats, some liberal interest groups argue that Social Security is sound and in no need of serious change.” Weisman does not address the question of whether Social Security is sound. The claim that it is is a problem for Democrats. Deviation from the journalists conventional wisdom is definitely a bad thing, even if the journalists are demonstrably wrong, and the liberal interest groups are demonstrably right. I assume Weisman thinks it is impossible to eliminate the deficit without cutting social security. This is nonsense. It is often repeated nonsense based on the invention of SocialSecurityandMedicare but it is still nonsense. If Weisman were willing to read the arguments made by the liberal interest groups whom he considers to be a complication, he would know this (he would also probably suppress that knowledge being who he is).
Worst of all he presents Paul Ryan’s “Roadmap” as exactly the sort of serious plan to deal with the deficit which is politically impossible. Even he must know by now that the plan would lead to a deficit roughly as large as Obama’s proposals while increasing taxes on 95% of Americans and eliminating Medicare as we know it. No passionate dedication to ignorance could have protected him from this knowledge. Clearly he has decided that presenting Ryan as a hero is good copy and let the facts be damned.
Grounds for optimism ? After reading this article published in what was once a great newspaper I despair.
As I stated above there is room in the 40% of federal outlays called discretionary spending aka war machine and corporate welfare.
They could raise user fees. Imagine if the Highway trust fund were holding $200B in treasuries, or the Air Transport?
Or the military industrial trust fund had a balance equal to the life of type pay out for just this years’ buying’s operating suppoort: $450B
At Economists View: anne said…
August 17, 2010
The Wall Street Journal Raided My Bank Account
Yep, I paid for the paper this morning. Okay, most people would not call that “raiding.” But where on earth does the Wall Street Journal get off saying * that the government has been “raiding” Social Security for decades? Was this article a paid political advertisement? (It reads that way.)
Of course, it makes as much sense to say that WSJ raided my bank account as to say the government raided Social Security. (Perhaps more, I thought I was buying a newspaper.) There was absolutely nothing improper done with Social Security money. It was used to buy government bonds. Readers of a business paper like the WSJ may have thought that its reporters understood how U.S. government bonds work.
The Social Security trust fund will redeem the bonds when they are needed to pay benefits, just as private citizens and corporations often buy bonds and then sell them off when they need the money for some other purpose. In the meantime, the government used the money it borrowed for other purposes. That is the way government bonds and other bonds work. It is also exactly how the law was been written, and it has been followed.
It also would been helpful to point out that there is no obvious problem with the deficit and debt levels discussed in the article. The text seems to have been written by a hyperventilating reporter, when the numbers should raise about as much concern as a 4-2 baseball score.
The economy of course does face a crisis. The collapse of the housing bubble has left 15 million people unemployed and is costing us $1.5 trillion a year in lost output. Remarkably, these basic facts are largely absent from the article as the WSJ seeks to get readers and voters to focus on the deficit and its goal of cutting programs like Social Security and Medicare.
— Dean Baker
Well, I agree with all of the above (so far)
but I would add one little caution
I have read at least one poll that said people would accept a small increase in their social security tax to save the program. this is the least discussed option because it is the one that makes the most sense.
every other option on the table contains the seeds of destruction of Social Security.
but the real caution here is that by advocating a strict “tax the rich” remedy for the deficits, you destroy your credibility… certainly with the rich. let us say instead, “raise taxes” and see that they are raised “progressively.” not falling into the trap of considering SS a “regressive tax.” it isn’t.
That SS needs to buy more T Bills to save itself is a massive con. That is false. That polling reveals respondent support it shows the power of the talking heads.
The long term issue is the debt. And dealing with the debt requires cuts to discretionary spending, while the masses may buy more T Bills with their payroll taxes it will merely delay the end of civil economy.
Check this graphic from GAO: http://en.wikipedia.org/wiki/File:GAO_Slide.png
Raising payrioll taxes to build surpluses just increases the future debt service unless general fund spending is cut and income taxes raised.
The place to cut is on the general funds side where much of the debt was accumulated.
Accumulating more T Bills in SS will mean this type debate will go on again and again.
The graph tells it all – mandatory spending could exceed revenues between 2030 and 2040.
Increasing the SS surplus just gives the government more time to transform debt the gpvernment owes to itself into debt it owes the public.
That is why I believe the surpluses should either stay in the trust fund (no borrowing from the Treasury to pay current expenses), or pay down the debt held by the public.
I don’t care about my credibility with the rich. However, it’s just as well if they don’t listen to me because 1) I have no power of influence so who cares what I think and 2) If my soak the rich plan were enacted, I would tell them “this is just the beginning” so it would be just as well if they didn’t believe me.
I hasten to add that I have nothing against the rich. Some of my best friends are rich. So are both of my very very beloved parents. I just want to take some of their money (they’s still be rich when I’m done).
Sorry, I should have given you the credit for the posting.
I agree with you completely.
As a long time commenter at AB, ilsm should know that coberly recommends incremental increases that don’t build surpluses.
Although the chart is only three years old, it is badly dated. Interest rates are currently lower and projected increases are now quite a bit lower. The revenue is locked at a percentage of GDP even though retirees are not locked at a percentage of total population.
When we get a recovery, we are going to need to do something about the deficit. Panicking is not one of them.