For a change, Martin Crutsinger's coverage at the Associated Press of the federal government's November Monthly Treasury Statement wasn't completely full of rose-colored baloney.
Crutsinger managed to note how auto-pilot entitlement programs like Social Security and Medicare are bankrupting the country (not in those words, of course). That said, he somehow thought that highlighting a rare and small increase in year-over-year defense spending was worthwhile, while ignoring several other larger percentage increases in other areas. Most importantly, he failed to note that the national debt has increased by far more than Uncle Sam's reported deficits. Excerpts follow the jump (bolds and numbered tags are mine):
US BUDGET DEFICIT WIDENED IN NOVEMBER
The federal budget deficit widened in November, driven by higher spending in areas as such as Social Security, Medicare and defense. [1]
The November deficit climbed to $64.6 billion, up 13.6 percent from a year ago, the Treasury Department reported Thursday. For the first two months of the budget year that began on Oct. 1, the deficit totaled $201.1 billion, a 12.6 percent jump from a year ago. [2]
Total receipts are up 2.9 percent to $416 billion over the past two months compared to a year ago. Tax revenues are growing as unemployment declines. But spending grew an even larger 5.9 percent to $617.1 billion.
The latest numbers underscore the deepening impact of paying benefits to a growing number of retiring baby boomers. [3] The report said Social Security spending expanded 4 percent, while Medicare spending increased 9 percent.
Spending on Medicaid, the government health care program for low-income individuals, rose 12 percent, partly due to an expansion authorized under the Affordable Care Act. [4]
Spending on defense military programs totaled $99 billion In October and November, a 2 percent increase over the same period last year. [1]
For the 2015 budget year that ended Sept. 30, the deficit fell to $438.9 billion, its lowest level in eight years. The Congressional Budget Office in August forecast that the deficit for 2016 will decline further to $414 billion and then rise slightly to $416 billion in 2017. [2]
... The October deal did avert a looming crisis over raising the national debt. Lawmakers approved suspending the debt ceiling until March 2017, allowing borrowing to rise with no cap until that time. The national debt currently stands at $18.7 billion. [5] (Note: it's $18.7 trillion; this mistake is AP's. — Ed.)
Notes:
[1] (tagged twice) — The mention of defense spending, which actually increased by 2.5 percent, is really pathetic. Defense spending has declined sharply during the past four fiscal years:
- Fiscal 2011 — $678.1 billion
- Fiscal 2012 — $650.9 billion
- Fiscal 2013 — $607.8 billion
- Fiscal 2014 — $577.9 billion
- Fiscal 2015 — $562.5 billion
That's 17 percent in real cuts, not the imagined "cuts" in projected spending the press typically falsely characterizes as "cuts" when favored programs are involved. Given many recent events at home and around the world, it's reasonable to assert that the American people have lost a lot more than 17 percent of their confidence that this government can keep the nation safe from its foreign and domestic enemies. (Update: Change that to "correct to assert.")
Of all the expense items Crutsinger chose to report, he picked on a relatively tiny $2.4 billion two-month year-over-year increase, which barely covers inflation, without disclosing that defense has seen almost $116 billion in real spending cuts during the past four years. The AP reporter's agenda-driven mindset could hardly be more obvious.
Meanwhile, to name just one other item, he ignored an 11.2 percent spending increase amounting to almost $3.4 billion dollars at the Department of Agriculture — a department where annual spending zoomed from $90.8 billion in fiscal 2008 to $139.1 billion in 2015.
[2] (tagged twice) — Maybe the CBO's projections of smaller full-year 2016 and 2017 deficits will come to pass. But so far, none of the projected $24.9 billion decrease (from $438.9 billion to $414 billion) predicted for fiscal 2016 has occurred. Instead, the deficit during the first two months of fiscal 2015 came in almost $23 billion higher. That does not bode well for the achievability of CBO's prediction.
[3] — In a rare admission, Crutsinger acknowledged that the nation's two core programs for the elderly are having a "deepening impact." He could have, and should have, told readers just how deep. Social Security's "trust fund," which became an accounting fiction decades ago once Congress raided it to enable continued spending on other programs, has been running annual cash deficits for at least the past five years. Thanks to Obamacare-related accounting gimmickry Medicare's chief actuary denounced three years ago, that program will supposedly go broke on paper in 2026, but is likely on track to hit a wall which would mandate serious real benefit cuts much sooner.
[4] — Obamacare, or the Affordable Care Act, is predominantly to blame for the explosion in Medicaid costs. The Obamacare exchanges have forced many thousands of people who "qualify" for Medicaid into the program whether they like it or not. At least as of a short time ago, those enrolled cannot revoke their enrollment. Additionally, states which have accepted the Obama administration's bribes to "expand Medicaid" have seen sharp enrollment increases which have resulted in "unexpectedly" higher spending, i.e., "treating enrollees in the states that expanded cost about $1,000 more than anticipated."
[5] — The AP must teach a course on "creative rounding" to its economics reporters. Even though the national debt has been higher than $18.75 trillion every single business day since Thanksgiving and stood at $18.83 trillion at the end of November, Crutsinger "somehow" rounded the debt balance down to $18.7 trillion.
More seriously, the AP reporter failed to do what the vast majority of business reporters have failed to do for decades. He didn't tell readers that, for a wide variety of "off-budget" reasons, the national debt is rising far more quickly than reported budget deficits would indicate:
- From September 30, 2014 to November 30, 2015, the government's reported budget deficits totaled $640 billion (as seen above $438.9 billion for fiscal 2015 plus the current year's two-month deficit of $201.1 billion.
- During that same period, the national debt increased from $17.834 trillion to $18.827 trillion.
- The nationl debt increase of $993 billion is over $350 billion, or 55 percent, greater than the reported budget deficits during those 14 months (that time period was chosen to avoid periods during which the Treasury Department engaged in accounting maneuvers to keep the officially reported national debt at its leglislatively mandated ceiling).
Those who came up with the idea of conducting so many elements of the federal government's operations "off-budget" clearly hoped that doing so would keep attention away from their negative financial consequences. Thanks to Marty Crutsinger and others in the business press, that tactic has worked quite effectively, perhaps even more than its "pioneers" could ever have imagined.
Cross-posted at BizzyBlog.com.
