Media Ignore CBO Report Bashing Senate Stimulus Plan
If the agency responsible for reporting economic data to Congress as well as commenting on budget proposals concluded the Senate's stimulus plan not only won't have much positive impact, but will actually hinder output in years to come, shouldn't the American people be informed about this?
On Wednesday, the Congressional Budget Office issued a rather pessimistic view of the stimulus bill in front of the Senate, and virtually no major media outlets reported it.
Not the New York Times. Not the Washington Post. Not USA Today. Not ABC, CBS, NBC, CNN, or MSNBC.
What were they hiding from the public? This (emphasis added):
Most of the budgetary effects of the Senate legislation would occur over the next few years. Even if the fiscal stimulus persisted, however, the short-run effects on output that operate by increasing demand for goods and services would eventually fade away. In the long run, the economy produces close to its potential output on average, and that potential level is determined by the stock of productive capital, the supply of labor, and productivity. Short-run stimulative policies can affect long-run output by influencing those three factors, although such effects would generally be smaller than the short-run impact of those policies on demand.
In contrast to its positive near-term macroeconomic effects, the Senate legislation would reduce output slightly in the long run, CBO estimates, as would other similar proposals. The principal channel for this effect is that the legislation would result in an increase in government debt. To the extent that people hold their wealth in the form of government bonds rather than in a form that can be used to finance private investment, the increased government debt would tend to “crowd out” private investment—thus reducing the stock of private capital and the long-term potential output of the economy.
In English, as our debt goes up, the dollars that are invested in it are taken away from other channels -- stocks, corporate bonds, private equity, real estate, etc. -- which, in the long run, produce jobs and generate output. The resulting decline in such investments will have, according to CBO, a dampening economic impact in the years to come.
Isn't the public entitled to know this? Should the media decide this isn't important enough for citizens to be aware of?
After all, if not for outlets like Fox News, the Washington Times, and Investor's Business Daily which all reported CBO's analysis, Americans would have been largely in the dark concerning this matter.
Is this the state of journalism today? Are we destined for years of omissions like this so that liberals in the media can aid and abet the Democrats who now control Congress and the White House?
Let's be clear: this isn't some think tank with an obvious political leaning. This is the Congressional Budget Office.
What else is going to be withheld from us in the coming years?