On a low-attention Sunday, the Associated Press's Tom Raum put together a pretty good analysis ("US debt will keep growing even with recovery"), though not labeled as such, of the serious financial situation the country faces thanks to the mushrooming national debt.
But the AP writer ignored two critical warnings raised in a related item he filed over a year ago on Wednesday, January 7, 2009 ("Analysis: Deficit spending is tough medicine") that have contributed mightily to the dire situation he described. In that report, Raum claimed that there was a "consensus ... that some form of major stimulus — either new spending, tax cuts or a mix — is needed ... so long as it is short term and doesn't include permanent new spending programs." It is clear that the stimulus plan passed last year has flunked both key concerns he raised.
Raum also blithely assumed that White House and Congressional Budget Office forecasts assuming a huge increase in collections are accurate, when there is ample evidence that they are not.
Here are key paragraphs from the AP's Sunday sounding of the siren:
Press reports about the prediction by President Obama's Council of Economic Advisers that the economy would add an average of 95,000 jobs per month during calendar 2010 weren't exactly overflowing with praise, but were lacking in something one would have expected: historical context.
Philip Elliott's Associated Press report provided none. Sewell Chan's New York Times coverage at least pointed out that the promised level of job growth was "barely enough to keep up with the normal number of jobs the economy would have to create to meet the growth in the labor force and keep the unemployment rate steady."
But how would what the administration predicts compare to previous recoveries? As seen in the following chart based on more detailed information here, all based on data from the government's Bureau of Labor Statistics, a 95,000 per month performance in job growth following a breakout quarter after a recession wouldn't exactly be impressive:
As described in a Wall Street Journal editorial today, those two organizations have caught the Obama administration playing with the federal budget numbers, specifically the "baseline." The editorial also makes two important points in its two final paragraphs (bolded by me):
... the White House is proposing to convert spending sold as a one-time economic boost into a permanent feature of future government growth. As both the Tax Policy Center and the Committee for a Responsible Federal Budget have pointed out, supposedly temporary parts of the stimulus—expansions of the earned income tax credit, the child tax credit and Pell Grants for college students—have now found their way into the budget baseline.
True to the way Mr. Obama has honored his campaign pledge of transparency, this news was buried in a footnote on page 170 of the budget's Analytical Perspectives.
On a nightly basis, MSNBC's Keith Olbermann pompously presents himself as being the smartest guy in the room as he belittles every leading Republican in the nation.
But on Tuesday, the "Countdown" host exhibited a staggering level of ignorance as he claimed "federal budget debt" -- whatever that is! -- as a percentage of Gross Domestic Product is "about the same as it was in 1970," and "far less than it was throughout the Reagan administration."
To begin with, there is no "federal budget debt." There's a federal budget DEFICIT and federal DEBT.
That this self-proclaimed genius doesn't know these are different things is by itself proof of his almost unimaginable incompetence on this subject.
Yet, whether he meant debt or deficit, what he told viewers during his "Worst Person in the World" segment Tuesday was 100 percent wrong (video embedded below the fold with transcript, h/t Right Scoop, file photo):
White House Budget Director Peter Orszag and Congressional Budget Office Director Doug Elmendorf have a problem: They can't revise their budget estimates quickly enough to account for the continued bad news about tax collections arriving daily from the Treasury Department. Luckily for them, but unfortunately for taxpayers, an establishment media obsessed with PDS (Palin Derangement Syndrome), TDS (Tebow Derangement Syndrome), and TPDS (Tea Party Derangement Syndrome) isn't paying any meaningful attention to the problem.
Back in August of last year, the CBO guesstimated that collections during fiscal 2010 will amount to $2.264 trillion. That guesstimate assumed a 7.5% increase over the $2.105 trillion collected in 2009, and clearly depended heavily on a revival in private-sector economic growth and employment.
Well, economic growth has occurred. The problem is that it's the government that has grown, while the private sector has shrunk. Additionally, according to the Establishment Survey published by Uncle Sam's Bureau Labor Statistics, seasonally adjusted total employment has continued to fall.
Thus, CBO dropped its estimate of fiscal 2010 receipts in projections it released in late January to $2.175 trillion. The collections guesstimate in the Obama administration's budget is actually a bit lower:
President Obama just submitted a $3.8 trillion budget proposal, the largest federal budget ever, which will come with a "record amount of red ink." The projected deficit of that budget would be $1.6 trillion, yet the networks didn't criticize him for being spendy.
To put this in perspective: Obama is proposing a budget $700 billion larger than big spender Pres. George W. Bush's last budget. It's TWICE the size of Pres. Bill Clinton's last budget of $1.9 trillion, who was credited with generating a budget surplus.
Despite the "staggering" size of Obama's budget, which broadcast networks admitted was "dripping with red ink," the reports managed to paint him as a fiscal conservative and deficit slasher.
NBC's Savannah Guthrie portrayed all the excess spending as a way to get the economy back on track saying: "He's asking for $100 billion to spur job growth - things like tax cuts for small business, tax breaks to increase wages - and he's doing this knowing that it will drive up the deficit, certainly even more in the short term. But all economists agree the real way to get a chunk out of the deficit is to increase hiring."
But Guthrie was highlighting only a tiny fraction of the overall budget and failed to criticize the administration for not finding ways to cut more waste.
CBS's Bill Plante also agreed with Obama's spending priorities for the $3.8 trillion budget Feb. 1 when he said the president "needs" to spend right now.
Only a liberal could imagine that addressing the federal deficit and creating jobs might be mutually exclusive. On MSNBC's Feb. 3 "Morning Joe," Chrystia Freeland of The Financial Times asked Sen. Debbie Stabenow, D-Mich., whether she agreed with President Obama's stated intention of addressing the deficit next year.
"Senator, we've also heard from the president that next year - in his budget for next year - he is going to be focusing on deficit reduction, and he thinks its gonna be time be worried about that," Freeland said. "Is that too soon? Are you worried that the president should really be focusing right now still on stimulating the economy?"
Stabenow took the cue to launch into anti-Bush boilerplate. "Well we have to be focused on both and it's tough," she said. "I mean this president not only inherited the biggest deficit we've ever had, but the biggest deficit in jobs that we've ever had. We've got over 15 million people without jobs right now - bread winners no longer able to bring in a pay check."
Historically, there are two kinds of White House reporters: those that confront officials with the strongest critique and demand a response (think ABC’s Sam Donaldson, who dogged Bill Clinton in the late 1990s just as he had Ronald Reagan in the 1980s); and those who see their job as simply repeating the White House spin of the day.
Reporting this morning on the Obama administration’s push for another $100 billion in spending, supposedly for “job growth,” NBC’s Savannah Guthrie fell into the second category. Rather than amplify the growing chorus of critics who argue that we can’t afford more massive spending when the previous “stimulus” was so expensive and ineffective, Guthrie on NBC’s Today saluted the President for making a “judgment call” that “all economists” could support:
This is a budget where the President makes a judgment call. He's asking for $100 billion to spur job growth, things like tax cuts for small business, tax breaks to increase wages. And he's doing this knowing that it will drive up the deficit, certainly even more in the short term, but all economists agree the real way to get a chunk out of the deficit is to increase hiring.
Poor Barack Obama. In becoming president he inherited the "hollow prize" of the United States of America. That was the astounding theory suggested this morning by Melissa Harris-Lacewell.
The Princeton professor of politics and African-American studies bemoaned the president's predicament on Morning Joe today. Apparently this "hollow prize" theory is in vogue in certain circles, used to decry the plight of African-Americans who only rise to powerful political positions in "hollow prize" places like Detroit.
Cautioning the Obama administration's “deficit projections...are just that, projections,” NBC's Chuck Todd on Monday evening bought into the White House's claim that Democratic health care reform bills that would add millions to the system are actually spending reduction measures, as he warned: “If health care doesn't pass, because this budget assumes health care will pass, that's yet another $150 billion that would be tacked on to the deficit.”
ABC's Jake Tapper also passed along the ludicrous contention, but at least stressed Obama's team is assuming passage of “reform” that's very unlikely to be enacted: “The President outlines a number of measures to reduce the deficit, over $1 trillion worth. But Diane, perhaps the most surprising, the budget assumes a savings of $150 billion over the next ten years from health care reform, legislation that is at the very best -- at the most optimistic -- on life support on Capitol Hill right now.”
Less than two months after receiving a Nobel Peace Prize, the President is proposing a huge increase in war spending.
Despite his campaign pledges to the contrary, Obama's new budget calls for expenditures associated with the wars in Afghanistan and Iraq to increase to levels only ten percent below the average of former President George W. Bush's last two years in office.
Given the media's anti-war predilections, it's going to be fascinating to see how the following numbers revealed by Politico a few hours ago will be reported in the coming days:
Robert Reich must have nightmares about Fox News. Shoot, he must have triple locks on his doors and sleep under his bed out of fear that Roger Ailes will come and take him away.
In a Monday column at Salon.com ("Is the President Panicking?"), Reich excoriated President Obama's proposed discretionary spending "freeze" -- a "freeze" that NewsBuster Julia Seymour noted fails to offset the spending proposals Obama brought up in his State of the Union speech -- for "invok(ing) memories of (Bill) Clinton's shift to the right in 1994," especially because "it could doom the recovery."
That was absurd enough, but in the process of recounting his fevered view of 1990s history, Bill Clinton's former Secretary of Labor threw in this whopper, revealing that for Reich, as Buffalo Springfield told us so many years ago in their 1960s hit song "For What It's Worth," paranoia really does strike deep:
In December 1994, Bill Clinton proposed a so-called middle-class bill of rights including more tax credits for families with children, expanded retirement accounts, and tax-deductible college tuition. Clinton had lost his battle for healthcare reform. Even worse, by that time the Dems had lost the House and Senate. Washington was riding a huge anti-incumbent wave. Right-wing populists were the ascendancy, with Newt Gingrich and Fox News leading the charge. Bill Clinton thought it desperately important to assure Americans he was on their side.
On the soon-to-be canceled ‘It’s the Economy’ program on MSNBC on Thursday, co-host Contessa Brewer grilled Republican New Hampshire Senator Judd Gregg on his calls to reduce out-of-control government spending: “Which programs are you willing to cut? Are you willing to tell schools, no money for you?” Gregg shot back: “What an absurd statement to make. And what a dishonest statement to make.”
Gregg called out Brewer for her unfair framing of the issue: “...nobody’s saying no money for schools....On its face you’re being fundamentally dishonest when you make that type of statement.” He went to explain the kinds of budget cuts he would make: “I would freeze discretionary spending, a real freeze, not a – not a freeze plus inflation. I would eliminate the T.A.R.P. money....I would end the stimulus spending effective in June of this year, if not sooner....reform our entitlement programs....I’ve made very specific proposals and I’m willing to stand by them.”
Gregg was far from finished, he described the big government mentality shared by the Obama administration and the liberal media: “The problem is that this administration’s view of governance is that economic prosperity is created by growing the government dramatically. And then it gets misrepresented by people like yourself who say they’re going to – that if you do any of this stuff you’re going to end up not funding education.”
On Wednesday's Countdown show on MSNBC, shortly before the beginning of the State of the Union address, as Keith Olbermann discussed the speech with Chris Matthews and Rachel Maddow, after Olbermann brought up the possibility that President Obama would give a divisive FDR-style speech, Matthews seemed to lament that such a speech would "spook" the middle class, and, as he credited the Democratic party with actually "creating" the middle class, he argued that Democrats are a victim of their own success. After claiming that it would have been "unpatriotic" not to increase government spending in time of recession, he went on to describe President Obama's economic policies as "conservative": "Everybody who studies economics knows if you have no business spending, no consumer spending, the government has to spend. That is reasonable and I would argue conservative economics."
At about 8:57 p.m., after contending that President Herbert Hoover "proved to every single American that the Great Depression was Republican doing," Matthews made his extraordinary claim about Democrats "creating" the middle class:
CRITICAL UPDATE AT END OF POST: Obama praised the 2009 budget when the Senate passed it!
After President Obama told the nation during Wednesday's State of the Union address that he inherited the huge budget deficits befronting the country, Sen. John McCain (R-Ariz.) turned to Sen. Lindsey Graham (R-S.C.) and said, "Blame it on Bush."
In reality, this was one of many Rep. Joe Wilson (R-S.C.) moments last night as the President once again played fast and loose with the facts in a nationally televised address.
Sadly, media are deeply at fault here, for if they wouldn't allow the White House to repeatedly blame the nation's current fiscal problems on the previous Administration, Obama would be forced to be more truthful. As NewsBusters has regularly shown, America's so-called journalists have been aiding and abetting these falsehoods for quite some time.
But before we get there, here's what Obama said last night (video embedded below the fold with partial transcript includes McCain saying "Blame it on Bush," file photo):
On the eve of President Obama's first State of the Union address, the lead story in Wednesday's New York Times by Jackie Calmes focused on Obama's abrupt transformation into a born-again deficit hawk: "Obama, On Own, To Set Up Panel On Nation's Debt."
In a related video, Calmes played along with Obama's sudden about-face, claiming "the president wants to make deficit reduction a big part of his second-year agenda." Obama can apparently do no wrong: After spending months defending Obama's costly stimulus package, Calmes is now giving Obama credit for the opposite: cutting spending!
Obama's pre-State of the Union political woes were barely mentioned, a far cry from how the Times treated George W. Bush's political misfortunes before his last two addresses.
At the top of Tuesday’s CBS Early Show, co-host Maggie Rodriguez highlighted the latest attempt at populism by the Obama administration: “President Obama calls for a big spending freeze and focuses on plans to help the struggling middle class, but does he have the political support he needs?”
Moments later, co-host Harry Smith introduced the story with a similar declaration: “President Obama will try and calm voter anger during tomorrow’s State of the Union address. He’ll announce plans to cut the growing federal deficit and help the struggling middle class.” Writing for the Heritage Foundation blog, The Foundry, Alison Fraser pointed out the problem with Obama’s supposed “spending freeze”: “If it applies to last year’s supercharged spending on stimulus steroids baseline, it’s no freeze at all, but a locking in of spending that was supposed to be temporary.”
Freezing government spending at its current record-high level would do nothing to “cut the growing federal deficit” as Smith asserted. White House correspondent Bill Plante pushed the same argument in a report that followed: “...the President has been busy for several days spreading his message of fiscal responsibility....in an effort to show that the federal government has to manage its budget by making choices, just as families must, the President is calling for a freeze on non-security spending for the next three fiscal years.”
Two Democrats on Sunday blamed the soaring budget deficit on George W. Bush, and ABC's Terry Moran didn't challenge either one of them.
First up on "This Week" was senior White House adviser David Axelrod who told substitute host Moran, "President Clinton left a $237 billion surplus, President Obama received a $1.3 trillion deficit."
Moran didn't challenge this, nor did he press Sen. Robert Menendez (D-N.J.) when he uttered virtually the exact same Democrat talking point moments later, "When George Bush came to office, he had a $236 billion surplus; Barack Obama was handed a $1.3 trillion deficit."
Here's how a REAL journalist might have responded the second time somebody made the same stupid comment in the course of about 15 minutes:
The charts definitely show how utterly wrong reporters like the Associated Press's Jeannine Aversa are when they claim that there has been anything resembling a "rebound" since the economy hit bottom from a growth standpoint in the second quarter of 2009 (the economy has yet to see an employment bottom). They also explain why AP reporter Martin Crutsinger seems to have tired of trying to put a "getting better" face on things in the past couple of days (as seen here and here at NewsBusters; here and here at BizzyBlog).
Here, after screen captures by Morrissey, are the two mind-numbing creations in question, the first showing changes in output (GDP) and the second showing changes in employment:
In his coverage of yesterday's Monthly Treasury Statement from Uncle Sam, the Associated Press's Martin Crutsinger, who I have criticized frequently for cruddy reporting, especially on federal finances, did a pretty good job reporting key facts and conveying very real concerns that are brewing over the country's current fiscal path.
In the process, he made a stunning admission about the economy's situation that has to be seen to be believed.
I find myself concerned that the previous paragraphs might cause Mr. Crutsinger to get called into a closed-door meeting where he gets asked what in the world is going on. If that happens, I have an agenda item he can bring up. I'll get to that later.
Crutsinger's only serious error was his final paragraph's mischaracterization of deficit trends during the Bush administration.
On Thursday, the Congressional Budget Office issued its Monthly Budget Review for December 2009. It estimates that December's federal deficit will be $92 billion when the Treasury Department releases its Monthly Treasury Statement on Wednesday, and that the deficit for the first fiscal quarter will be "about $390 billion." The CBO director's related blog post is here. The establishment press has virtually ignored it.
Here is the initial result of a Google News search on "CBO deficit" (not in quotes) for articles relating to the Congressional Budget Office's Thursday estimate of the federal government's deficit for the first quarter of its fiscal year:
Clicking on the "all 10 new articles" reveals that there are really only four results, that three of them are at blogs, and that only one of the blog posts is from an establishment media site:
The Associated Press's Tom Raum had to work really, really hard to come up with a sunny way to present today's jobs report and the President's reaction to it, which consisted of awarding $2.3 billion in "New Clean Energy Manufacturing Tax Credits."
Here's what he concocted: The weak employment report gave Obama the chance to change the subject from terrorism, where he continues to get hammered by Republican meanies, to something else. It's as if the only reason that the job losses occurred is because the Undie Bomber distracted Dear Leader's attention from his domestic agenda.
Here are key paragraphs from Raum's ramblings:
Obama refocuses on jobs after weak labor report
His agenda altered by the Christmas bombing attempt, President Barack Obama pivoted back to the domestic economy on Friday, promoting new U.S. spending to create tens of thousands of clean-technology jobs.
Despite six months of positive economic growth, Treasury collections are continuing what is now a serious two-year downward slide.
In August, the Congressional Budget Office projected that collections during the fiscal year that will end on September 30, 2010 will be $2.264 trillion (PDF; page 2 at link). That's $159 billion, or about 7.5% higher, than fiscal 2009's final total of $2.105 trillion.
There's a problem. Unless there's a surprise when the final numbers come out next week, Uncle Sam's receipts for the quarter that just ended, i.e., the first quarter of the 2010 fiscal year, are already $60 billion behind the previous year. Somehow, this is not news.
Through November, as seen here, collections were already behind last year by about $40 billion ($268.9 bil vs. $309.6 bil). From all appearances, December was little better, as its estimated take of $218 billion trailed last year's $237.8 billion.
On Thursday, the Treasury Department issued a press release, called "Update on Status of Support for Housing Programs." Its fourth paragraph reads as follows:
At the time the Federal Housing Finance Agency (FHFA) placed Fannie Mae and Freddie Mac into conservatorship in September 2008, Treasury established Preferred Stock Purchase Agreements (PSPAs) to ensure that each firm maintained a positive net worth. Treasury is now amending the PSPAs to allow the cap on Treasury's funding commitment under these agreements to increase as necessary to accommodate any cumulative reduction in net worth over the next three years. At the conclusion of the three year period, the remaining commitment will then be fully available to be drawn per the terms of the agreements.
Translation: No matter how badly things further deteriorate at these former government sponsored enterprises, both of which since last year in essence have become government-controlled enterprises, Uncle Sam (i.e., current and future generations of taxpayers) will cover their losses.
Here is how three different news outlets headlined this Treasury/Obama administration move:
The Associated Press should seriously consider renaming itself "Associated Dems" or "Associated Leftists."
This morning, the AP's Charles Babington uncritically relays the latest Democratic Party talking point about its statist health care plan that has been passed in two very different forms in the House and Senate. The supposed point is that anyone who voted to create Medicare Part D in 2003 and voted against ObamaCare is "obviously" a flaming hypocrite.
Along the way, Babington ignores a Congressional Budget Office report response issued just before Christmas asserting that characterizations of the Senate's bill as reducing future government deficits are wrong. Beyond that, the litany of other distortions and errors in Babington's report is perversely impressive in its no-fib-or-spin-left-behind comprehensiveness.
Here are the first several paragraphs of Babington's babble, followed by its final sentence:
GOP lawmakers change tune on costly health plans
Democrats are troubled by the inconsistency of Republican lawmakers who approved a major Medicare expansion six years ago that has added tens of billions of dollars to federal deficits, but oppose current health overhaul plans.
In keeping with the tradition of the holidays - the minds at MSNBC, the place for politics if you're of the lefty persuasion, decided rate the top 10 political stories of the decade.
And leading this gang of masters of the political journalism universe was "Hardball" host Chris Matthews, who on the broadcast of his Dec. 24 program, announced that conservative activism, mainly the tea party movement was the eighth biggest story of the decade - but labeled "angry white voters" (emphasis added).
"Welcome back to ‘Hardball' - our number eight political story of the decade, angry whites at town hall meetings across the country," Matthews said. "Lawmakers heard the wrath of angry voters."
On January 1, 2009, the final 4.2% stage of a four-year, 21% cut in individual income taxes took effect in Ohio. State tax withholding tables reflecting the lower rates went into effect. Ohio employees began seeing a bit more net pay in each paycheck.
This past week, the state legislature, faced with an $850 million shortfall and threats of immediate school funding cuts by Governor Ted Strickland, repealed that 4.2% cut for both 2009 and 2010. Ohioans who had taxes withheld throughout all of this year at lower levels will have to make up the difference when they file their 2009 returns next year. They will also see higher state income tax withholdings from each paycheck all of next year.
Thus, Ohioans will be paying more in income taxes for quite a while longer than they would have if things had been left alone.
But apparently we're not supposed to call this a "tax increase," and a clearly retroactive one at that. No-no-no. According to Strickland, Ohio Democrats, a few alleged Republicans, the Associated Press, and Ohio's compliant establishment media, this is a "tax cut delay." Journalists are going to extraordinary lengths to avoid writing or uttering the words "tax" and "increase" consecutively. Is there a new stylebook rule against doing that?
Here's a roundup of some the reality-avoiding language used: