Is Associated Press economics writer Martin Crutsinger quietly converting to supply-side economics?
This is noteworthy, because Crutsinger has usually been the go-to reporter for uncalled-for gloom and doom about the economy for at least the past few years (a few examples are here, here, here, and here).
Here are the specifics about Crutsinger's possible epiphany. In May, covering the record US Treasury receipts in April, the AP reporter told readers the following about why the Uncle Sam's budget was running at a deficit (though there is no byline at the MSNBC link, Crutsinger is indeed the author; the now-expired Yahoo! story I linked to in May at this post did have his byline; bold is mine):
The federal budget was in surplus for four years from 1998 through 2001 as the long economic expansion helped push revenues higher. But the 2001 recession, the cost of fighting a global war on terror and the loss of revenue from President Bush’s tax cuts sent the budget back into the red starting in 2002.
But Thursday, in writing about the full fiscal year ended September 30 deficit of $162.8 billion just reported by the US Treasury -- over 34% lower than it was in fiscal 2006, and $249 billion lower than in fiscal 2004 -- Crutsinger had quite a different take (bold is mine):
While there were projections that the budget would run up surpluses of $5.6 trillion over the next decade, the bursting of the stock market bubble in 2000, the recession that followed in 2001 and the terrorist attacks, which led to increased military spending to fight wars in Afghanistan and Iraq, pushed the country back into deficit spending.
Okay, the gratuitous mention of the projected multitrillion-dollar surpluses that no one believed at the time wasn't necessary. But unlike his May report, Crutsinger's Thursday piece quite correctly did not tag the Bush tax cuts as a deficit contributor. Also unlike May, Crutsinger acknowledged, by mentioning it first, that the stock market bubble burst was chronologically the leading cause of the "recession" and the return to deficit spending. He even managed to deliver the core of the Bush Administration's take on the fiscal year's deficit without delivering his customary string of "yeah, buts."
(For the record, as noted at this March 2006 BizzyBlog post, there was a "recession" only because the the Business Cycle Dating Committee at the "nonpartisan" National Bureau of Economic Research [NBER] said so. According to the traditional definition of a recession, which is two quarters in a row of negative growth, there never was a recession. See for yourself.)
There are still a couple of glaring factual errors in Crutsinger's report:
- First, he writes that "The national debt is the accumulation of the annual deficits." If only that were so. In reality, thanks to budgetary shenanigans that go all the way back to the 1960s, the national debt is the sum of the reported "on-budget" deficit his report covers plus a number of other "off-budget" items. The national debt was $8.507 trillion at the end of fiscal 2006, and $9.008 trillion at the end of fiscal 2007 (the $9,007,653 million found at this link). The reported deficit of of $163 billion accounts for less than 1/3 of the $501 billion increase in the national debt between fiscal year-ends.
- He also claims that "Republican candidates are vowing to make permanent Bush's tax cuts, which are due to expire at the end of 2010; Democrats want to roll back the tax cuts received by the wealthiest taxpayers." In fact, Hillary Clinton, Barack Obama, and John Edwards have each proposed tax increases that go beyond reinstating the Bush cuts, and congressmen like Charlie Rangel want even further increases than the ones outlined by the presidential candidates.
So by no means was Crutsinger's coverage a model of perfection, but it represents a significant improvement. May the improvement continue without backsliding.