58% of Network Stories Claim Default Inevitable by Oct. 17; Experts Disagree
If you watch ABC, NBC and CBS, you might think that the debt default is inevitable. Market experts aren’t so sure. While the debt ceiling will be reached on Oct. 16 without Congress intervening, the jury is out on what would actually happen. Many experts, including Forbes, Bloomberg Business Week and Moody’s Corp., have argued that the default would actually hit weeks later, if at all.
Since the shutdown was first mentioned – from September 20 until October 12 – the term “default” has been used in 67 morning and evening news stories. Of these, 58.2 percent (39 out of 67) talked about the default as if it were inevitable. ABC was the worst, with 74 percent (17 of 23 stories) insisting that the default was inevitable. Fifty-six percent of CBS stories (14 out of 25 stories) said the default would definitely occur on the 17th, and NBC had 42 percent (8 out of 19 stories).
Out of all 67 stories, there were only two mentions of the $17 trillion national debt that will continue to officially increase once the debt ceiling is raised. That’s just 3 percent of all stories.
CBS “Evening News” on Oct. 8 claimed that “One Wall Street analyst” who was never named “said calculating the affects of U.S. debt default is like preparing for a large asteroid impact.” Such sentiments sum up the attitude of the network news to the default.
According to Forbes, “the chance of a default is pretty close to zero.” Even the liberal Bloomberg Businessweek admited that, “Deal or no deal, the U.S. will not default on its debt on Oct. 17.” According to both sources, Nov. 1 is the real default deadline.
Forbes reported that Moody’s Corporation released a report saying that the US credit score won’t actually be hurt by the shutdown or crossing the debt ceiling deadline of Oct. 17. Moody’s is one of the companies that issues the U.S. credit rating.
Not all economists were in agreement that the U.S. credit rating would survive Oct. 17 intact, withFitch Ratings, the third-largest debt rating company putting U.S. Treasury bonds on Rating Watch Negative, which often happens before a downgrade.
Still, the networks reflected little of the debate. “The President said a default caused by the failure to raise the government’s borrowing authority could create economic disaster,” CBS Chief White House Correspondent Major Garrett warned on CBS “This Morning” on Oct. 9. However, Garrett admitted that a “sizeable number” of House Republicans believe the President “can avoid default by paying bondholders first and other bills over time: and that “the president’s press conference was designed in part to scare Republicans out of that belief.”
On the Oct. 7, CBS “This Morning,” Sen. Tom Coburn, R-Okla., contradicted this argument. “I would dispel the rumor that is going around that you hear on every newscast that if we don’t raise the debt ceiling we will default on our debt. We won’t. We’ll continue to pay our – our interest, we’ll continue to redeem bonds, and we’ll issue new bonds to replace those so that – it’s not entirely accurate.” Coburn went on to say that it was fiscally irresponsible of the government to enact Obamacare if it was that badly off financially.
Economists and market experts seemed to generally agree with Coburn on that point. On the Oct. 8 edition of NBC’s “Today Show,” Jim Cramer, host of CNBC’s “Mad Money,” said that “no, there’s still some money in the till. We’re not sure exactly how much.” Although Cramer did say that “we do know that by Nov. 1, there’s not enough money,” he added “I imagine that what they’ll do is pay the – interest on the debt so therefore there’s not a real default.”
On NBC “Nightly News” on Oct. 9, Sen. Rand Paul (R-Ky.) tried to dispel the belief that he wanted the United States to default. “I’m not advocating we go through the debt ceiling deadline but what I am saying is if you go through it, you will not default and that leaders in – in our country should reassure the world’s markets we will not default.”
But the networks kept referring to the default on Oct. 17 as a sure thing. On ABC “World News with Diane Sawyer” on Oct. 8 and 10, Jonathan Karl even referred to Oct. 17 as “D-Day for default.”
One of the only two mentions of the actual size of the national debt was on Oct. 8, ABC “Good Morning America,” when Jonathan Karl said, “with nearly $17 trillion of national debt, if it isn’t raised by Oct. 17, the federal government will go into default. The administration warns default could trigger an economic meltdown. President Obama is adamant that Congress must raise the debt ceiling without any conditions or negotiations.”
Throughout these broadcasts, the president was painted as someone who wanted to save the country, if Congress would just let him. Oct. 5, NBC “Nightly News,” White House Correspondent Kristen Welker, introduced a clip of President Obama by saying “fears are mounting as another deadline looms. Oct. 17. That’s when the nation hits its debt ceiling and runs out of money to pay its bills. President Obama tried to tamp down those concerns.”
But the president’s only words of encouragement to “tamp down those concerns” were that he hoped there were “enough votes in the House of Representatives right now to make sure that the United States doesn’t end up being a deadbeat.”