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Home Publications Blogs Beat the Press AP Gets It Right! The Recession Caused the Deficit

AP Gets It Right! The Recession Caused the Deficit

Saturday, 20 August 2011 08:51
AP did what news organizations are supposed to do; it checked the numbers and showed that politicians yelling about "out of control spending" don't know what they are talking about or are making things up. Its FACT CHECK, printed in the NYT, showed that the deficit exploded because of the recession. There was no issue of out of control spending prior to the increases for programs like unemployment insurance and other spending needed to counteract the effect of the downturn. AP gets an "A" for this one.
Comments (9)Add Comment
written by izzatzo, August 20, 2011 2:12
This headline in MSM spread 'round the world will send Obama into a second term.

Boy Monarch Bush requested a recount by AP, noting there's no way he added in his second term 75 times as much as Obama did to the deficit since it was caused by the recessional recission of reduced tax revenuisms to which his stimulator tax cuts were not casually related.

Stupid liberals.
Give them an "A"?
written by John Puma, August 20, 2011 8:20
Only if there had NEVER been a recession that resulted in reduced jobs/income/tax revenues.

And ... three years to figure it out?

I'll provisionally grant them a "B-" and reserve the right to flunk them outright and expel them as soon as they revert to their default setting of demonstrating that they "don't know what they are talking about or are making things up."
Saving the financial system caused the deficits
written by Linus Huber, August 21, 2011 4:01
The banks have been given the privilege to create money in the form of extending credit. With the Fed as conductor, over the past 30 years they have done so in extremis. In most Western countries the overall debt levels(private, business, government) are in the range of 300-400% of gdp. To simply maintain those levels at an rate of interest of 2%, the economy is saddled with yearly burden of 6-8% of gdp. If some of the debt becomes questionable, lets assume a third for simplification, and the market would demand 8% on that third, the economy would be saddled with a burden of 12-16% gdp.

Does this sound sustainable?

The interesting part of present actions of pretend and extend is the fact that those who caused this situation by being insufficiently diligent when extending credit, are still enriching themselves instead of being made accountable.
written by John Q, August 21, 2011 12:25
"AP Gets It Right! The Recession Caused the Deficit"

Your headline is not quite right. We already ad a sizable deficit before the recession; the recession is the reason the deficit has increased as much as it has.
Sorry, typo
written by John Q, August 21, 2011 12:27
had instead of ad
written by S. D. Jeffries, August 21, 2011 1:56
The AP is usually clueless when it comes to economic issues; their writers tend to speak to some pre-selected VIP's and then just write what they're told. It's gratifying to realize they might be speaking with VIP's with different viewpoints now.

Or it could be that the usual VIP's are changing their perspective, considering the country's economic problems (and their origins), are becoming more obvious now. Perhaps this means the VSP's are finally realizing that their previous perspectives have been misguided and their "solutions" would be downright destructive. Anyway, one can dream.
Wages Rise, Deficit Falls
written by Scott ffolliott, August 21, 2011 4:50
Universal Healthcare
It's Free For Everyone
Tax the 10% as opposed to selling them bonds to pay back interest on
written by Mike B), August 24, 2011 10:06
With 88% of the wealth produced by workers going to 10% of the population, it might be better to tax them to provide government services as opposed to selling them bonds to have to pay back with interest.
Louis Cardinals
written by Louis Cardinals, August 26, 2011 9:35

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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.