AP Story: 'Deep Cuts' (Which Aren't) Are a 'Threat' to the Economy
In their deeply deceptive Friday morning story ("Deep spending cuts pose a new threat to US economy") about how the bicameral bipartisan supercommittee is supposedly going to hurt the economy with whatever results from its handiwork, Christopher Rugaber and Daniel Wagner of the Associated Press, aka The Administration's Press, "somehow" forgot to include one "little" detail, and deferred another until very late in their report.
The omission, which is that the "cuts" under consideration are really reductions in projected spending increases in future years, is sadly typical. The fact is the $1.2 trillion in "savings" the supercommittee hopes to engineer will only slightly reduce the rate of spending growth. The deferral is that the pair waited until Paragraph 18 to tell readers, and even then only incompletely, that the "deep cuts" would be spread over nine years, thereby amounting to roughly 3% of the $40.3 trillion if projected 2013-2021 spending (Page XI here). The AP pair never explains how "cuts" which wouldn't kick in until the October 1, 2012 beginning of fiscal 2013 and which are (as they have almost always been) heavily skewed towards later years would affect the current economy. Excerpts from the pair's report follow (bolds are mine):
Deep spending cuts pose a new threat to US economy
Just as the U.S. economy is making progress despite Europe's turmoil, here come two new threats.
A congressional panel is supposed to agree by Thanksgiving on a deficit-reduction package of at least $1.2 trillion. If it fails, federal spending would automatically be cut by that amount starting in 2013.
Congress may also let emergency unemployment aid and a Social Security tax cut expire at year's end.
Either outcome could slow growth and spook markets.... The 12-member bipartisan panel, or supercommittee, was created in August to defuse a political standoff over raising the federal borrowing limit. If it can't agree on a deficit-reduction plan, automatic spending cuts would hit programs prized by both parties: social services such as Medicare for Democrats, defense for Republicans.
... Many economists hoped that an extension of the Social Security tax cuts and unemployment benefits would be part of a supercommittee deal. Congress could extend those benefits separately. But it would be under pressure to offset the cost to avoid raising the deficit.
The Social Security tax cut gave most Americans an extra $1,000 to $2,000 this year. Unemployment benefits provide about $300 a week. Most of that money quickly and directly boosts consumer spending, which drives the economy.
... If the automatic spending cuts take effect, the defense budget could be cut by nearly $500 billion over nine years. Some contractors are nervous.
It takes eighteen paragraphs for readers to learn that the supposedly "deep cuts" involved are actually spread over nine years. Even then, the AP pair, by tying the spread-out only to defense, may give many the impression that other cuts all occur in fiscal 2013.
One can't help but think that the entire point of Rugaber's and Wagner's story was to create something, anything, to append to a predetermined "deep cuts" headline which would show up on news tickers, computers, smartphones and other devices for the sole purpose of creating anger and anxiety. There aren't any "deep cuts" as an ordinary person would understand the term, and they don't pose any immediate "threat" to economic growth. Those facts hardly seem to matter.
Cross-posted at BizzyBlog.com.