As I pointed out Monday night (at NewsBusters; at BizzyBlog), Associated Press reporter Martin Crutsinger, in his Saturday morning report on the federal government's full-year fiscal results, conveniently "forgot" about a major accounting change that enabled President Obama's Treasury Department to report a final "deficit" of "only" $1.417 trillion.

That's hundreds of billion of dollars lower than the $1.75 trillion expected in February. The change, which caused "investments" in financial institutions, General Motors, Chrysler, and other entities to be accounted for on a "net present value" (NPV) basis, had an initial impact of over $175 billion when first implemented. Crutsinger ignored the change, even though its implementation occurred after that February estimate.

Though the end of a fiscal year represents a perfect opportunity to extend readers' understanding of how our government (sort of) works, Crutsinger also did not tell readers that the reported "deficit" is nowhere near the amount of the increase in the national debt that occurred during the fiscal year. As of September 30, the national debt was $11.910 trillion, or $1.885 trillion higher than the national debt a year earlier. That means that the most recent year's "unreported deficit" was $468 billion.

One other area where Crutsinger erred was in his breezy opening paragraph assessment that the precipitous drop in cash receipts during the most recent fiscal year -- officially understated for a reason I will note shortly -- was entirely due to the recession:

Though its $1.4 trillion red-ink result was mostly known well ahead of its final issuance, the Treasury Department either conveniently got its year-end accounting work done in time for a Friday afternoon release of the final Monthly Treasury Statement, or held it until that time. Last year's report was released on Wednesday, October 15.

The final statement shows receipts of $2.105 trillion, "outlays" of $3.522 trillion, and a "deficit" of $1.417 trillion. That is $962 billion higher that last year's "deficit" of $455 billion.

The terms "outlays" and "deficit" are in quotes for reasons I will explain in this post.

There is good news and bad news about the reporting on the results by the Associated Press's Martin Crutsinger. The good news is that after at least three months of obsessing over how the wars in Iraq and Afghanistan were contributing to the massive increase in this year's "deficit" compared to fiscal 2008 when they have been almost completely if not totally irrelevant (here, here, and here at NewsBusters; here, here, and here at BizzyBlog), Crutsinger correctly dropped them from the discussion. Of course, that means he was repeatedly wrong to cite those wars or even defense spending as a whole as a contributing factor in the first place. But don't wait by the phone for Martin's apology.

The bad news follows.

Somebody really needs to find the Associated Press's Martin Crutsinger some OCD therapy. It seems that he has a not-magnificent obsession with the two major theaters of the War on Terror (yeah, I still call it that), and that he seemingly won't be able to conquer it without outside intervention.

In his report on August's federal budget deficit, the AP reporter continued to cite the wars in Iraq and Afghanistan as contributors to the increase in the federal budget deficit, when they are in fact virtually if not totally irrelevant. Additionally, he betrayed a critical misunderstanding of how the government has decided to account for "investments" the Treasury Department has made in many financial entities, General Motors, and Chrysler.

This is the third consecutive month for Crutsinger's war-connected crud:

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):

In a report meant to cover Uncle Sam's release of June's Monthly Treasury Statement, Associated Press reporter Martin Crutsinger went well beyond the wire service's normally lazy, slanted reporting in this area.

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.

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:

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 yesterday about 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 that are, if anything, accelerating. I'll cover that problem in this post.

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. That is the subject of Part 2.

Here are key background and receipts-related paragraphs from Crutsinger's report:

You have to see this to believe it, and even then you'll have a hard time believing it. It's the Obama administration's deficit reduction program, otherwise known as "change the accounting."

Here is what the Monthly Treasury Statement (MTS) from Uncle Sam looked like in March:

Here is the report for April:

I got this e-mail yesterday from CNN shortly after Uncle Sam's Monthly Treasury Statement for March was released:

That was indeed a serious piece of news. Only halfway through the year, the federal government's deficit for fiscal 2009 is already larger by far than any previous year's deficit.

So I was curious to see how the Associated Press's Martin Crutsinger might work this story to minimize the damage to Dear Leader, President 'Prompter himself, Barack Obama.

That Crutsinger and AP intended to go above and beyond the call of duty was obvious in the headline. Wait for it:

Here are the key numbers (in red) in Uncle Sam's November Personal Income and Outlays report (the July :

Common sense says that the chart's results after adjusting for inflation are more important (identified as "Chained [2000] dollars") than those in current dollars. Consmers' disposable income went up 1.0% in real (after-inflation) terms in November after a 0.7% increase in October.

It took a month for real consumer spending ("Personal consumption expenditures") to catch up to the increased disposable income, but it did so in a big way in November. The 0.6% real increase is the highest in over three years. Both improvements are objectively good news, and are largely due to sharply declining gas prices.

This is pretty fundamental Econ 101 stuff, isn't it? As you can see from the headlines and the treatment of the real spending increase that follow, the business press mostly flunked, and badly:

Democrats, including president-elect Barack Obama and Senate Banking Committee Chairman Christopher Dodd, received more money in campaign contributions from Fannie Mae and Freddie Mac than any other members of Congress.

You couldn't tell that from an Associated Press article published Sunday which completely blamed Republicans for the lack of regulation and oversight of Freddie Mac.

In fact, when you add it all up, Pete Yost's "AP IMPACT: How Freddie Mac Halted Regulatory Drive" is more like a blog posting at a Netroots website than something that should come from the nation's leading wire service (h/t NBer Dana Brown):

Associated Press lead reporter Liz Sidoti, other contributors (AP Director of Surveys Trevor Tompson, AP News Survey Specialist Dennis Junius and AP writer Alan Fram), and the wire service's supposedly vaunted editors apparently don't understand what a polling margin of error is.

In a Wednesday story I found in four different places (CBS News, AP-Google, Breitbart, Yahoo! News), Sidoti et al let a paragraph stand claiming that a 3.5% margin of error in the poll results they were reporting meant that the real results could vary by as many as 14 points.

Here are the key paragraphs found in each story (bold is mine):

Last month, it was the Associated Press's Jeannine Aversa's turn to mishandle the reporting on Uncle Sam's Monthly Treasury Statement on the government's receipts, spending, and deficit.

Aversa's usual specialty is hallucinating over "blizzards of pink slips" and "jobs vanishing into thin air" when she does her "report," aka her downbeat propaganda piece, on the government's monthly jobs release.

In covering June's Monthly Treasury Statement, Aversa selectively rounded the data she presented (covered at NewsBusters; at BizzyBlog) to make receipts look less impressive and to minimize the true extent of the government's current year spending spree.

To cover July's Monthly Treasury Statement, the AP brought in Martin Crutsinger, who once again botched the report in his own unique way (saved at host for future reference).

Crutsinger actually did pretty well through most of the report, but he blew it up in its final two paragraphs, which are also the final two paragraphs in the following excerpt (bolds are mine):

The Associated Press's Martin Crutsinger got out the gloom-and-doom paint in his report on the Consumer Price Index on Friday morning.

Here are his opening paragraphs:

Inflation rate jumps by biggest amount in 6 months

Inflation shot up in May at the fastest pace in six months, pushed higher by soaring costs for gasoline and other types of energy.

The Labor Department reported Friday that consumer prices rose by 0.6 percent last month, the biggest one-month increase since last November, as gasoline costs surged by 5.7 percent. Food prices, which have also been rising sharply, were up 0.3 percent as the cost of beef and bakery products showed big gains.

Core inflation, which excludes energy and food, edged up a more moderate 0.2 percent in May. But even there, core prices are up 2.3 percent over the past 12 months, above the Federal Reserve's comfort zone.

Trouble is, the markets weren't buying into the negativity Crutsinger was selling, as SmartMoney.com reported after the closing bell:

In his report on Uncle Sam's Monthly Treasury Statement released Wednesday afternoon, the Associated Press's Martin Crutsinger incorrectly informed readers that the stimulus checks sent out by the government represented the major reason why May's monthly deficit ballooned from a year ago. The AP reporter also continued with the wire service's seemingly never-ending recession obsession.

Here's the headline, and how Crutsinger began his report:

Stimulus payments result in record May deficit

A flood of economic aid payments pushed the federal budget deficit to $165.9 billion, the highest imbalance ever for May.

The Treasury Department reported Wednesday that the May deficit was more than double what it was in May 2007. Some $48 billion in payments went out as part of the $168 billion economic relief effort to revive the economy and keep the country from a deep recession.

Don't miss the significant reporting errors noted at the end of this post.

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If this were a boxing match, with "The Economy" in one corner, and "Expectations" in the other, we'd be seeing a third-round knockout with "Expectations" taken away in an ambulance.

But if you think the news this week has changed the tone of the Associated Press's business and economy coverage, think again.

There have been three pieces of pretty decent news so far this week:

Anyone wishing to understand why leftist bias pervades US "mainstream" media reporting will benefit from reading Steve Boriss's May 18 column ("Is the Associated Press Good for America?") at Pajamas Media.

Boriss quickly runs down the history, and gets right to the point: The self-described "not-for-profit cooperative" has a history of acting as a monopolist:

Someone forgot to tell the Wall Street Journal's Kelly Evans and Justin Lahart, carried here at the Arizona Republic, that they're supposed to portray the economy in a bad light whenever and wherever possible. I'll get to the pair's report later.

That "bad light" directive seems seared into the minds of the Associated Press's Martin Crutsinger and his AP colleagues, as they continue to "cling to recession," and attempt to convince consumers and businesses that if perchance we're not already in one, it's just around the bend.

The AP's persistence has borne dreadful fruit. Relentlessly downbeat reporting during at least the past six years by the wire service's business reporters -- who largely determine what most Americans see, hear, and read about the economy -- is a big reason, if not the most important reason, why most Americans, as seen in the latest consumer confidence report, have a negative economic outlook and are convinced that we are in a recession.

Friday, Crutsinger worked mightily to take the lemonade that was the good housing starts report and turn it into lemons:

The Federal Reserve reported Thursday that April industrial production fell, the second negative reading in the past three months. Specifically, February and April fell by 0.7%, and March showed an increase of 0.2%.

In May 2001, that same report showed that production fell for the seventh consecutive month.

Seasonally adjusted data from the Fed indicates that industrial production during those seven months (October 2000 through April 2001) fell 2.6%.

During the past seven months (October 2007 through April 2008), industrial production has fallen 1.7%.

Guess which set of circumstances generated more talk of recession?

How do you write an article about Uncle Sam's April financial results without telling readers how much money came in and went out -- especially if what came in was an all-time record?

Yesterday and today, many journalists have shown us how. Two of them are Martin Crutsinger of the Associated Press and Michael M. Phillips of the Wall Street Journal.

Crutsinger's AP report actually made it appear as if collections is the problem area. In fact, as you will eventually see after the jump, April's result had nothing to do with "dampening" revenue growth, and everything to do with exploding spending.

Crutsinger began as follows: