Be Skeptical, Be Very Very Skeptical in Reading NYT Budget Reporting

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Saturday, 12 October 2013 20:15

That's what the NYT told readers at the very beginning of its piece on negotiations over the reopening the government and the debt ceiling. Okay, that line probably was not intended to refer to the NYT's budget reporting, but it certainly is appropriate in that context.

This stuff is getting to be a really bad joke. At one point this piece tells readers:

"That suggests a less ambitious outcome for any deficit-reduction talks that would spring from the current impasse. In the past, the general goal was $4 trillion in savings in 10 years that would compound over time."

Less ambitious, really? The $4 trillion referred to in that "grand bargain" scheme was compared to a 2010 baseline that assumed far larger deficits. Over the 10 year horizon from 2014-2023 that baseline would have shown deficits of more $9 trillion (see the "plausible baseline" in figure 14 ). Due to the sharp spending cuts and tax increases that have been put in place in the last two years, the current baseline shows a cumulative deficit over this period of 6.3 trillion. This means that the amount of deficit reduction discussed in this piece is very much in line with, and quite possibly larger than the "grand bargain" for which the NYT apparently lusts.

The reality is that the sharp deficit reduction we have seen in the last three years has thrown millions of people out work and cost the country more than $1 trillion in lost output. It is bizarre that this fact is rarely noted in the NYT's budget reporting and it instead tries to imply that there is some urgency about addressing deficits projected for the distant future that may not even materialize.