Amid all of the tributes to Ted Kennedy’s lengthy career of expanding the scope of government and its cost to taxpayers, CNN’s American Morning on Friday dug up a six-week old op-ed from the Tax Policy Center’s Len Burman warning that massive trillion-dollar deficits are a catastrophe that could lead to the end of the U.S. as a great power “or even a mediocre one.”
With the on-screen graphic reading “Higher Taxes Inevitable?” business correspondent Christine Romans announced to viewers “I’ve just got to tell you about this handwringing that's happening, and what it's going to mean for you. We're spending vastly more than we take in. We will for the foreseeable future. We're racking up these deficits, we pay interest on all of this debt.”
Remember the shock generated when the Obama Office of Management and Budget recently announced that the projected 10 year deficit was increased from $7 trillion to $9 trillion? Guess what? That lastest projection is based on "make believe" economics. Although most media outlets have failed to report on it, stories from both Reuters and Forbes reveal that the true 10 year budget deficit will probably be...fasten your seatbelts...well over $11 trillion.
To put yourself into the proper mood for their analysis of the OMB "make believe" deficit projection, it is best to listen to the "Make Believe" tune from Showboat (sorry, Howard Keel version unavailable).
Are you ready? Okay here is the first piece of evidence from Reuters about why the projected 10 year $9 trillion budget deficit provided by the OMB is only a "make believe" prediction:
Try to keep a straight face when you hear this: President Barack Obama isn't getting enough media love.
That's the world view of MSNBC "Hardball" host Chris Matthews - at least when it comes to the economy. According to Matthews, there has been a plethora of positive economic news - from a stock market that has shrugged off the threat of bad liberal policy, i.e. cap-and-trade or ObamaCare, to the actions of newly reappointed Federal Reserve Chairman Ben Bernanke of pumping liquidity into the economy.
"What do you make of this whole thing about the good economic news out there the president gets no credit for?" Matthews said on his Aug. 25 show. "I'm in the stock market. I have suffered like others before and I have seen this comeback - back up to almost 10,000 now. He gets nothing for this. The fact that consumer confidence, which was once closer to the bone, is way up. The fact that the Fed chair has done such a good job in pumping up the money supply and pumping back the economy, and averting a Great Depression - no credit."
Does the Associated Press's Martin Crutsinger moonlight as a Code Pink operative?
There has to be something that explains what I'll call his Iraqnaphobia.
Last month (at NewsBusters; at BizzyBlog), the AP reporter erroneously cited the cost of the wars in Iraq and Afghanistan as a "major factor" explaining why "the deficit has widened." In a quick review of the related June 2009 Monthly Treasury Statement, I cited three examples of higher spending in other areas of government that were larger than last year, both in dollar and percentage terms, than the $33 billion, 7% increase in total defense spending. NB commenter Arminius further pointed out that "Our military spending amounts to 5 percent of GDP. Iraq and Afghanistan amount to 15 percent of that 5 percent. Obviously, as Tom notes, larger culprits are responsible for the massive deficit."
It's simply not possible that the two wars can be a "major factor." No matter -- This month, in an otherwise fairly decent report, Crutsinger did it again (bold after title is mine):
Ben Bernanke's able use of monetary policy to steer the economy during the current financial crisis sometimes makes it easy to forget that Bernanke helped steer the ship into that crisis early in his term as Federal Reserve Chairman and a member of the Fed's Board of Governors. That's a point Strategic Forecasting (Stratfor) founder and CEO George Friedman made when asked the likelihood of President Obama reappointing Bernanke.
"Bernanke presided over the events leading up to the greatest financial crisis we've seen in quite a while," Friedman told CNBC's Steve Liesman. "The best that can be said is that he didn't make it any worse than he already made it. The president is not going to be wanting to reappoint the man that most of the country regards as responsible for the problem."
Yours truly and others have since April noted a precipitous and likely historic dive in Uncle Sam's monthly collections. Year-over-year declines actually began last summer. The degree of monthly fall-offs has gotten "progressively" worse since then.
Yesterday, the Associated Press finally went beyond blandly reciting year-to-date comparisons to note the historic significance of the cash crash at the Treasury. Even then, Stephen Ohlemacher's report understated the degree of the decline in receipts from economic activity (i.e., excluding last year's stimulus payments, which were treated by Treasury as "negative receipts"). He also only carried his analysis through June 2009, even though sufficient information about the full month of July was available in Treasury's last daily statement of the month released yesterday afternoon.
A common theme of the new administration and their media minions is that all the problems associated with the economy and the rising budget deficits are George W. Bush's fault.
On Sunday's "This Week," Treasury Secretary Timothy Geithner said (video available here, relevant section at 9:40):
Remember we inherited a $1.3 trillion deficit. The cumulative consequences of the policies this country pursued over the last 8 years left us with 6 trillion dollars of more debt than we would have had by making a bunch of commitments to cut taxes and add to spending without paying for those.
Sadly, host George Stephanopoulos didn't challenge Geithner on these numbers. Here are the facts:
Unless you are hopelessly liberal and/or drinking WAY too much Kool-Aid, you are fully aware that President Obama and his Democrat minions on Capitol Hill can't get enough money from the so-called rich to pay for all the programs they're proposing.
On Saturday, such an inconvenient truth was actually revealed by none other than the New York Times:
"This idea that everything new that government provides ought to be paid for by the top 5 percent, that's a basically unstable way of governing."..."There is no way we can pay for health care and the rest of the Obama agenda, plus get our long-term deficits under control, simply by raising taxes on the wealthy...The middle class is going to have to contribute as well."
CNN correspondent Carol Costello aired a fair report on Friday’s American Morning about the several states which passed resolutions that asserted their rights under the Tenth Amendment to the U.S. Constitution, and asked for viewer responses on the issue, but later stated that her “favorite [viewer] comment so far...‘asking for states’ rights is asking, you know, the children to be the parents’” [audio clips from the report are available here].
Costello began her report, which aired just before the bottom of the 6 am Eastern hour, with the question, “should states’ rights trump the fed?” She also highlighted the premise that “the concept of states’ rights is as old as America.”
The CNN correspondent used three sound bites from Texas Governor Rick Perry’s speech to a tea party in April 2009, which was widely circulated around the Internet. She also featured clips from an Republican state legislator from Oklahoma and a constitutional law professor.
Subtitled: "Washington is spending $60 billion to create the careers of the future, but not a single green job yet exists. Obama's 'green czar' explains."
The Leftist publication deserves some plaudits for exploring this $60 billion gaping hole in the $787 billion "stimulus" package President Barack Obama signed into law in February. But there are many points in the article where they could have done better.
It would have been nice, for instance, if Newsweek had exhibited some of the scrutiny they show here in advance of the massive plan's passage. They begin with an interesting realization:
On Tuesday's Glenn Beck Program on FNC, host Beck picked up on P.J. Gladnick's recent NewsBusters posting which helped bring attention to President Obama's double standard in charging that Congress was "rushed" by the Bush administration into passing budgets and anti-terrorism measures with little time for debate -- in a 2004 interview with Randi Rhodes on the left-wing Air America -- even though as President he has pressed Congress to act quickly on a number of major spending proposals since taking office.
Beck also ran a clip of Congressman John Conyers as the Michigan Democrat scoffed at suggestions members of Congress should read and understand bills before voting for them. Conyers: "To get up and say, 'Read the bill.' What good is reading the bill if it's 1,000 pages and you don't have two days and two lawyers to find out what it means after you read the bill?"
During the show's regular "Hot List" segment, Beck recounted: "The Web site NewsBusters.org posting a November 2004 interview with Air America's Randi Rhodes, where Senator-elect Obama complains about the Bush administration."
Then an audio clip of Obama from the 2004 interview ran:
In late April, the Associated Press's Calvin Woodward, in a "Fact Check" report ("Obama disowns deficit he helped shape"), hit President Barack Obama's claims that he and his party don't deserve much of the blame for the size of this year's deficit pretty hard. It was such a surprise that I wondered who had put truth serum in his coffee.
Well, you might have guessed it would be Calvin Woodard doing the primary honors in an AP Fact Check that again takes aim at the President, this time over his health care bill. With the co-bylined help of Jim Kuhnhenn and contributions from Ricardo Alonso-Zaldivar, Woodward and his team went after several claims made by Obama at his Wednesday press conference that don't stand up to scrutiny.
ABC anchor Chris Cuomo played the liberal emotion card and asked California Governor Arnold Schwarzenegger during an interview on Wednesday’s Good Morning America if Republicans were “playing politics” with President Obama’s health care “reform” proposal, and whether this was turning into a “little bit of a reckless situation” on the part of the GOP. [audio available here]
Cuomo first put the health care issue in the context of California’s budget woes, and started out of the gate with his plea to people’s emotions in his first question to the governor: “Your state is somewhat of a window into the reality of health care. You’ve been pictured at your desk with a big knife, having to cut the budget- over $1 billion in health care cuts. It’s going to affect low-income families. It’s going to affect the coverage that children get. Is this absolutely necessary?”
After Schwarzenegger’s answer, the ABC anchor then turned to the president’s proposal for health care “reform,” and asked the liberal Republican governor why he supported it. The former actor clarified that he didn’t 100% support Obama’s plan, “because I don’t know exactly what is in that bill. It changes all the time, as you know.” Cuomo followed up by asking if he was leaning towards supporting it. Schwarzenegger again didn’t give a solid answer.
It's one of the few times one can wish the reporting by NBC News was right and CNBC was wrong.
A segment on the July 21 "NBC Nightly News" pointed out some of the key points of a budget deal reached between California Gov. Arnold Schwarzenegger and leaders of the state legislature. The deal means some service cuts - but also includes the possibility of exploration and drilling for oil off the California coast.
"California is our biggest state in terms of population and it long ago ran out of money," "Nightly News" anchor Brian Williams said. "They got nothing to pay the vendors they owe and now they have struck a deal for more cuts, and these are going to hurt. They're going to allow offshore drilling for the money it will bring in. The LA Times reports tens of thousands of seniors and children would lose access to health care. Prisoners will spend less time in prison. And the governor is going to sell cars and furniture and office supplies and autograph some of it, he says, to raise more money. It's an unbelievable turn of events."
Noel characterized Raum's report as suggesting that "the White House's delay in releasing an update about the budget might be tied to the administration's desire to get controversial bills on healthcare reform and cap and trade passed before Congress and Americans know just how large the deficit really is." That's because the delayed report would more than likely tell the nation that this year's deficit is expected to be even bigger than expected (using proper cash-flow reporting, which I'll get to), and future years' projected deficits are even more likely to be unsustainably high.
Two important things were missing from Raum's report. First, there was a total dearth of detail about how badly the current fiscal year that began on October 1 of last year has gone -- most especially the last quarter. Second, Raum saved until near the end of his report a prediction by one of the wire service's go-to "experts" -- the first such prediction I've seen -- that Gross Domestic Product will contract yet again in the third quarter.
Spreading the Word Media Research Center President and NewsBusters.org Publisher Brent Bozell today responded to a poll conducted by the University of Texas Health Science Center at Houston and Zogby International that finds that 84 percent of Americans, including 46 percent of Americans without health insurance, are "very satisfied" or "satisfied" with the health care they currently receive.
Released on Wednesday, the poll was glaringly absent from most news reports late last week and over the weekend.
Bozell today called on the media to stop reporting on the American health care system as a "crisis" situation, as the facts simply belie the claim.
The Associated Press Monday suggested that the White House's delay in releasing an update about the budget might be tied to the administration's desire to get controversial bills on healthcare reform and cap and trade passed before Congress and Americans know just how large the deficit really is.
With this currently a featured link at the Drudge Report, and it coming from the leading wire service in the world, one has to wonder how Obama-loving media -- who all seem behind healthcare reform as well as cap and tax! -- will cover this revelation.
After all, imagine how these same press outlets would be reporting this if George W. Bush was still in office and was proposing tax cuts to get the economy going while delaying such a budget update:
You know when a liberal has lost any capability to understand the common American when they completely miss the pain that liberal tax hikers cause the average citizen in this country. Charlie Cook recently showed this elitist attitude in a National Journal column on the outrageous costs of the Cap and Trade bill – better called the Cap and Tax bill. Of course, to him, the tax hike on the average American is not a big deal and he doesn’t understand how anyone could be upset over it all.
Cook is perplexed why Washington pols were “getting an earful” from constituents over the energy tax hikes that the Cap and Trade bill will force on the nation. He just couldn’t figure why adding “only” an additional $175 a year to the average citizen’s electric bill was such a big deal.
In his report's apparent final incarnation early Tuesday morning, the AP writer:
Told us the amount of June's deficit ($94.3 billion), but didn't disclose the figures for June's receipts ($215.4 billion) or "outlays" ($309.7 billion), or how they compared to June of last year. In doing so, he "succeeded" in concealing the accelerating decline in tax collections.
Didn't tell us that the past month's deficit is by far the worst June ever.
"Forgot," as he did in May, to tell readers that the deficit would be hundreds of billions of dollars higher if it weren't for an "accounting change" retroactively put into place by Treasury in April that changed the definition of "outlays."
Cited the Iraq and Afghanistan wars as contributors to the deficit situation, while not identifying several other expenditure categories that have been worse offenders by far.
Found an economist, without dissent, to support the claim that what the Obama administration has done had to be done.
And that doesn't even count Crutsinger's Krugmanesque rewrites of the history of the 1930s Depression era and 1990s Japan, or the apparatchik-like tone present in a few of his paragraphs.
Not one to let "a serious crisis to go to waste," Franklin Delano Roosevelt used the onset of the Great Depression as an excuse to immediately begin delivering New Deal dollars in unprecedented amounts - with laser-like political precision to electorally important parts of the country. He sailed to landslide reelection in 1936 on a federally-funded tailwind.
The New Deal is now an old one - as direct mail guru Richard Viguerie describes it, "We've got money, you've got votes, let's talk." If this is what Time had in mind for Obama to learn, he has proven to be an apt pupil.
And USA Today seems to have picked up on it.
We at the Media Research Center always love to give journalistic credit when and where it is due. And the USA Today today deserves serious credit for Brad Heath's look into how:
"Billions of dollars in federal aid delivered directly to the local level to help revive the economy have gone overwhelmingly to places that supported President Obama in last year's presidential election."
That quote is in fact the first sentence of the article. No burying the lede or mincing of words here.
Why is CNBC's Rick Santelli one of the few press members willing to point out when the emperor isn't wearing any clothes?
As you ponder that important question, consider how Santelli on Tuesday morning recognized how absurd Vice President Joe Biden's Sunday comments were concerning the Obama administration misreading how bad the economy was.
After all, as Santelli marvelously asked: "How many hundreds of times has the current administration talked about the worst recession in history? The worst time since the Depression?"
As we near the end of June, which is supposed to be one of the four biggest months for federal tax collections (January, April, and September are the others), it is clear that the serious receipts shortfalls are not only continuing, but have caused the March 20 projections of the administration and the Congressional Budget Office (CBO) to be outdated.
Media coverage of the ongoing receipts dive has been minimal at best. A Google News search on "federal receipts" (typed in quotes) returns on seven items, two of them originating from yours truly.
Here is where things stand as of the last Friday of June in both 2009 and 2008, per Uncle Sam's related Daily Treasury Statements:
ABC's online "The Note" describes itself as "Washington's Original and Most Influential Tipsheet." ABC News's Senior Political Reporter Richard Klein is its current content creator.
We'll see how influential "The Note" really is if what Klein writes about the machinations behind the attempt to make us forget that the Obama stimulus plan was supposedly going to be making some kind of difference at this point gets out anywhere else. Color me skeptical.
No doubt, Klein gets in some pretty strong, accurate, and long-overdue rips (links are in original):
For Time Magazine, Kevin O'Leary has decided that he's figured out why California is in such a budget mess. Is it because the state indulges over generous social programs, or always has some of the highest taxes in the nation, or because the denizens of its capitol in Sacramento are paragons of waste, fraud and theft? Nope. It's because California has Proposition 13, a measure that prevents state government from too easily raising taxes. Yep, O'Leary thinks California is in a mess because it doesn't have high enough taxes. And it's all Reagan's fault.
With some of the highest taxes in America, California is a hard place to make a living. According to the Tax Foundation, on average it takes a citizen 110 working days to earn enough money to pay his yearly tax bill. That is the fourth worst in the country. California consistently ranks in or near the top 10 worst states for its tax burdens from property taxes, to corporate taxes, to individual taxes and fees of all sorts. So, how can O'Leary imagine that taxes aren't high enough in California?
Maybe reporters Brian Faler or Nicholas Johnston at Bloomberg asked Barack Obama some really challenging questions when they had a chance to interview the President at the White House. Maybe they even did some basic fact-checking. If so, there's precious little evidence of either in their June 16 report.
They allowed the president to blame most of the current year's deficit on George W. Bush. They let him speak of "robust" growth when the best guesstimates they quoted for the second half of this calendar year and all of next year are anemic -- at least as the press benchmarked growth during the Bush 43 years.
The Bloomberg pair also ignored the alarming deterioration in federal receipts from economic activity that has continued into June, one of the four biggest collections months of the year.
Here are key paragraphs from Faler and Johnston's failed filing (bolds are mine):
A calm Sunday breakfast might have been ruined after a glance at The Washington Post’s front page on June 14. A chart below the fold explained that under Obama’s federal spending proposals, the United States would be required to borrow $9 trillion during the next decade. That’s $9,000,000,000,000. The Post compared that, in today’s dollars, to the financial burden of World War II: $3.6 trillion. That’s not all of Obama’s spending plan. That’s only the part that’s in the red.
Is it any wonder that a recent Gallup poll found more people disapprove rather than approve of Obama’s handling of the deficit? But we’ve only just begun. Now President Obama wants to add another enormous chunk of government health-care spending. The Congressional Budget Office projects that the latest Democratic bill in the Senate would add another one trillion dollars to the budget over the next decade, and they suggest that’s only a partial estimate.
In John Harwood's Sunday Week in Review piece, "Rethinking The Reagan Mystique," he claimed Republicans are rejecting Ronald Reagan as a political inspiration and urging their party to look forward. He probably overstates the case. However, Harwood does come up with a novel insult of Reagan: The man the media labeled a heartless budget-cutter was actually a runaway spender in disguise!
For a liberal Democrat, President Obama has offered generous praise for the most celebrated of his recent Republican predecessors.
Mr. Obama has credited Ronald Reagan with having "changed the trajectory of America" in ways Bill Clinton didn't. "President Reagan helped as much as any president to restore a sense of optimism in our country, a spirit that transcended politics," Mr. Obama said earlier this month while signing the Ronald Reagan Centennial Commission Act in the presence of Nancy Reagan.
It's not surprising that Mr. Obama has embraced Mr. Reagan's achievement since it seems akin to his own aspirations and might also ingratiate him with conservatives. What is surprising is the increasingly ambiguous position Mr. Reagan holds on the right.
A fabulous 1934 Chicago Tribune cartoon that has recently been making the rounds in the blogosphere as an example of history sadly repeating itself was marvelously rerun at the paper's website on June 10.
In it, members of Franklin Delano Roosevelt's administration are seen shoveling money out of a wagon with a billboard on the side declaring, "Depleting the resources of the soundest government in the world."
On Wednesday, the Trib reprinted the cartoon with the caption "This is a 1934 Chicago Tribune political cartoon that many say rings true in today's political and economic climate. What do you think?" (full, largely legible print below the fold along with an explanation of the characters uncovered by The Federal Observer, h/t NBer Gary Hall):
It's pretty hard to dress up a disaster as something less than that, but the Associated Press's Martin Crutsinger gave it his best shot in his report yesterdayabout Uncle Sam's the May Monthly Treasury Statement, in effect understating the amount and significance of federal government's rapidly deteriorating financial situation.
With the help of dubious handling of last year's stimulus payments in May 2008's Treasury Statement, Crutsinger ignored serious declines in tax receipts from economic activity (over 30% in each of the past three months) that are, if anything, accelerating. I covered that problem in Part 1.
Additionally, after only briefly mentioning it last month (noted at the time at NewsBusters and at BizzyBlog), Crutsinger grievously erred in his explanation of how a convenient "accounting change" Treasury implemented in April relating to accounting for its Troubled Assets Relief Program (TARP) has affected the reported year-to-date deficit. He claims that it contributed to it, while in reality the accounting change reduced it by about $180 billion. That is the subject of this post.
Here are key background and accounting change-related paragraphs from Crutsinger's report: