CNN Money Wants You to Be Scared About the Deficit

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Wednesday, 25 August 2010 14:13

How else can we explain the fact that in a country suffering from the worst unemployment crisis in 70 years, CNN Money headlines a piece: "America's Debt Crisis"? CNN Money probably does not have access to financial market information. Otherwise it would know that the interest rate on U.S. government bonds are near 60-year lows.

This suggests that financial markets are not at all worried about U.S. government debt. The debt crisis exists only in the heads of people who are either unaware of financial markets or who are trying to spread fear in order to get political support for things like cutting Social Security.

The piece notes the opposition of many groups to cuts to Social Security, but then tells readers that: "nonpartisan deficit experts say the debt trajectory for the country is so worrisome that nothing in the federal budget can be off the table. That includes Social Security, which will only be able to pay out roughly three-quarters of promised benefits to future retirees by 2037."

This might be true, but nonpartisan deficit experts also point out that if the United States fixed its health care system then it would have massive budget surpluses as far as the eye can see. Nonpartisan deficit experts also point out that Social Security payments are already relatively meager compared to what most other countries pay their retirees. Nonpartisan deficit experts also point out that most retirees have very little other than Social Security to support themselves. And, they point out that Social Security's shortfall can be relatively easily made up with revenue increases that are comparable to those put in place in the decades of each the 1950s, the 1960s, the 1970s, and the 1980s.

It appears as though CNN Money only spoke to nonpartisan deficit experts who wanted to cut Social Security.