CEPR - Center for Economic and Policy Research

Multimedia

En Español

Em Português

Other Languages

Home Publications Blogs Beat the Press

Beat the Press

 facebook_logo  Subscribe by E-mail  


Tell Market Place, Peter Peterson Spent $1 billion of His Own Money to Cut Social Security Print
Friday, 19 November 2010 05:56

BusinessWeek editor Peter Coy told Market Place radio listeners that Peter Peterson spent $1 billion of his own money to inform people about the budget problems facing the country (emphasis in original). This is not true.

Peterson has consistently pushed for cuts to Social Security and Medicare. He has never supported the presentation of a balanced picture of the country's budget situation. For example, even though it is easy to show that the projected long-term budget deficit is entirely attributable to projections that per person health care costs in the U.S. will rise to three or four times the average for rich countries, this fact is largely concealed in Peterson-financed budget projects.

Peterson has almost completely excluded any discussion of financial sector taxes (the source of his wealth) from budget debates, even though there is wide recognition that the sector is a source of massive waste and rents. He has also routinely misrepresented the state of Social Security's finance in his public statements, repeatedly insisting that there is no trust fund. This is completely untrue and is an invention of Mr. Peterson. As can be seen in the Social Security trustees report and numerous other budget documents, the trust fund currently holds more than $2.5 trillion in government bonds.

 

 
How Could Brazil and Thailand Be Worried About Both a Falling Dollar and Rising Inflation from QE2? Print
Friday, 19 November 2010 05:54

It's okay for reporters to point out when important people aren't making sense. In fact, it is really part of their job.

We are told in the same piece that there is concern that the Fed's QE2 policy will drive down the value of the dollar and also that:

"Brazil, Thailand and other emerging economies, which fear that a surge of foreign capital will drive up prices and interest rates."

In this situation, it is appropriate to point out these views are contradictory. If the dollar falls in value relative to these countries' currencies, then it will make imports from the United States cheaper, driving down prices in these countries, not pushing them up. A lower dollar will also reduce exports from these countries, which will lower employment, thereby also reducing inflationary pressures. An inflow of foreign capital would be expected to push interest rates down, not up.

In short, if the views of the leaders of these countries have been presented accurately, then they badly misunderstand basic economics. This should have been pointed out to readers.

 
The IMF Could Not See the Housing Bubble That Wrecked the Economy, Wants Countries to Reduce their Deficits More Quickly Print
Thursday, 18 November 2010 08:10

The Washington Post thought it was important to tell readers that the IMF thought that deficit reduction plans in many countries are inadequate because these countries were overly optimistic in their growth projections:

"in its recent review, the IMF warned that governments were relying on optimistic assumptions about economic growth and had not yet specified adequate cuts in spending to control their finances."

 

It would have been worth reminding readers that the IMF managed to overlook the housing bubbles in the United States, Spain, Ireland and other countries that led to the current economic crisis. In fact, if IMF economists were held to the same standard of accountability as ordinary workers, the vast majority of them would be among the 15 million unemployed. If readers were aware of the quality of the economic work produced by the IMF they would probably not give its concerns much credence. 

 
NPR Gives Mara Liasson Segment to Lobby for Cuts in Medicare and Social Security Print
Thursday, 18 November 2010 05:22

NPR departed from normal journalistic standards this morning when it gave a reporter the opportunity to present her opinions on dealing with the deficit as facts to its listeners. Mara Liasson told listeners that it is not possible to address the deficit while leaving any specific area untouched. She included Medicare and Social Security on this list. 

Her statement is of course not true, as many people have shown that it easy to meet deficit targets without touching Social Security. In fact, on Tuesday, Representative Jan Schakowsky, a member of the President's deficit commission, laid out a plan for meeting the commission's deficit target that did not touch Social Security or Medicare. Ms. Liasson may not like Representative Schakowsky's proposal, but it is dishonest journalism to deny that a plan like this exists.

It is also easy to show that the deficit is first and foremost the result of our broken health care system. The country currently pays more than twice as much per person for health care as people in other wealthy countries. This ratio is projected to rise to three and four to one in the decades ahead.

If these projections for health care prove accurate then it will devastate our economy regardless of what we do with the budget deficit. On the other hand, if our health care costs are brought in line with costs in the rest of the world, then the country does not face a long-term deficit problem. Honest reporting on the deficit would point out this simple fact.

 
A Budget Proposal From A Commission Without a Single Member That Saw the $8 Trillion Housing Bubble That Wrecked the Economy Print
Wednesday, 17 November 2010 06:20
Yes, that would be the Rivlin-Domenici commission. In elite Washington circles ignorance is a credential.
 
Industrial Production: The Story is the Rise In Manufacturing Print
Wednesday, 17 November 2010 06:07
The Post told readers that industrial production was unchanged in October. This is true, but that is the result of a 3.4 percent plunge in the output of utilities, which is primarily a function of the weather. Manufacturing output increased by 0.5 percent in October and a reported decline of 0.2 percent in September was revised to a gain of 0.1 percent.
 
Ireland: A Textbook Example of the Dangers of Balanced Budgets and Fiscal Responsibility Print
Wednesday, 17 November 2010 05:53

Ireland is in the headlines these days as its government struggles with insolvency. Remarkably, none of the news stories remember to point out that Ireland was a model of fiscal responsibility in the years leading up to its current disaster. Not only did it balance its budget, Ireland ran large budget surpluses in the 5 years preceding its collapse in 2008. Its peak surplus in 2006 was 2.9 percent of GDP, the equivalent of a surplus of roughly $420 billion in the United States.

Like the deficit hawks in the United States, Ireland's political leaders ignored the country's massive housing bubble, the collapse of which sank its economy. It is interesting to note that, while Ireland's background to the deficit crisis is generally ignored, news reports on Greece's financial difficulties routinely referred to its large budget deficits in the years leading up to the crisis.

 
Economic Growth and Budget Deficits Print
Wednesday, 17 November 2010 05:28

David Leonhardt has a good piece pointing out the simple fact that more rapid economic growth will substantially reduce the budget deficit. However he overlooks an important part of the story.

More rapid growth makes the country richer. In his hypothesized growth speed-up, the country grows 0.5 percentage points more rapidly on average over the next two decades. If this happened, then people would be roughly 10 percent better off on average in 2030 than under current projections. 

If people are wealthier, then the cost of sustaining the government would be less of a burden. For example, in this fast growth scenario if we had a tax increase equal to 1 percentage point of GDP in 2030 (a large tax increase), it would still leave people with roughly 9.0 percent more after-tax income than in the baseline scenario even without a tax increase.

In other words, if before tax income grows more rapidly, then after-tax income can increase rapidly even if a somewhat greater portion is diverted to the government in tax revenue. Since the deficit is often put as a generational issue, if workers 20 years from now enjoy much higher after-tax incomes than workers today (which they will in every plausible scenario), it is difficult to understand why anyone today should be troubled if workers in future decades will pay a higher tax rate.

 
NYT Misrepresents Trade Pacts Print
Wednesday, 17 November 2010 05:11

The NYT referred to the trade pacts with South Korea, Panama and Colombia as "free-trade" agreements. Of course this is inaccurate. They do not free all trade, most notable trade in highly paid professional services like physicians and lawyers' services. These areas are highly protected by conscious policy. The deals also increase protection in some areas, most notably for patents and copyrights.

Trade pacts have been unpopular with much of the country because they have been designed to place manufacturing workers in direct competition with low-paid workers in the developing working, thereby driving down their wages. By contrast, they have largely left in place the protection from such competition enjoyed by the highest paid workers. As a result, they have contributed to the growth of income inequality in the last three decades.

 
Warren Buffet Boasts About the Billions the Government Gave Him Through TARP Print
Wednesday, 17 November 2010 05:01

Warren Buffet has a thank you note in the NYT. He certainly owes a big thanks to the taxpayers, after all he put a $10 billion bet on Goldman Sachs at the peak of the crisis. Without our help, he would have lost his whole bet.

Of course the issue is not as he presents it here. The question was not whether or not the government did something to keep the financial system functioning. The question was whether the rescue would save investors like Buffet, who were knowingly taken big risks with their money, the highly paid executives of the major banks, and preserve the speculative culture of Wall Street. 

That's what TARP was about. Mr. Buffet has very good grounds to be thankful that the rescue was structured to make preserving the wealth of the wealthy the top priority. The 25 million unemployed and underemployed people may feel differently.

 
<< Start < Prev 341 342 343 344 345 346 347 348 349 350 Next > End >>

Page 348 of 404

CEPR.net
Support this blog, donate
Combined Federal Campaign #79613

About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

Archives