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Home Publications Blogs Beat the Press Front Page Post Editorial Tells Readers that Dems Would Face Better Prospects With 11 Percent Unemployment

Front Page Post Editorial Tells Readers that Dems Would Face Better Prospects With 11 Percent Unemployment

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Saturday, 04 September 2010 05:21

Most political experts believe that a strong economy favors incumbents, but the Post told readers the opposite in a front page piece that urged Democrats to embrace deficit reduction. The piece noted comments from several Democratic senatorial candidates urging budget cuts, then told readers:

"The new push for austerity could prove too little, too late for Democrats, who fear losing their majorities in both chambers of Congress. In dozens of House and Senate races, incumbent Democrats are struggling in polls, leading political analysts to raise the serious prospect of Republican takeovers in the House and even the Senate."

Of course the deficits that the country is now running are sustaining the economy. If the deficits were lower, then output would be lower and unemployment would be higher. The Congressional Budget Office (CBO) recently estimated that the stimulus has reduced the unemployment rate by between 0.7 and 1.8 percentage points.

The CBO estimates imply that if the Democrats had been earlier in their push for fiscal austerity and not pushed through the stimulus, then the current unemployment rate would be between 10.3 percent and 11.4 percent. This Post piece asserts that this situation would have improved their electoral prospects in November, although it cites no one who backs up this position.

The editorial, which is not labeled as such, includes several other unsupported assertions. At one point it told readers that government spending is out of control, commenting that "Democrats vow to bring spending under control," which of course is only possible if spending is already out of control.

It also implies that the Democrats have spent recklessly commenting about their "conversion to fiscal restraint" and the difficulty of convincing voters that they are serious. Of course the only budget surpluses in the last 40 years were run with Democrats in the White House, and the largest structural deficits were run under Republican administrations, so it is a bit bizarre that the article would imply that Democrats need to convert to "fiscal restraint."

The article also told readers the country's fiscal health is in danger and that the changes need to restore it are unpopular:

"Some fiscal hawks are skeptical that either party is willing to make the unpopular decisions necessary to restore the country to fiscal health."

The financial markets do not believe that the country's fiscal health is in danger, otherwise they would not make long term loans to the government at interest rates below 3.0 percent. It is also not clear that the steps needed to ensure that long-term budget deficits do not become a problem are unpopular.

While one source cited in the story (Robert Bixby, the director of the Concord Coalition) wants to cut Social Security, Medicare and Medicaid, it is only necessary to fix the U.S. health care system to ensure stable budgets into the indefinite future. If the United States paid the same per person health care costs as people in any other wealthy country we would face huge long-term budget surpluses rather than deficits.

The piece should have also pointed out Colorado Senator Michael Bennet's error when he asserted that we are borrowing from China because of our budget deficit. The United States is borrowing from China because of its trade deficit, which is in turn the result of an over-valued dollar. This is an embarrassing gaffe from a senator.

It is also worth noting that this editorial did not once mention the unemployment rate. This is remarkable for a piece discussing the Democrats' election prospects.

 

 

Comments (11)Add Comment
The next two years will be ugly
written by LJM, September 04, 2010 7:35
Living in Kansas and expecting to get Gov. Brownback and other rightwing state officials (like Kris Kobach for sec. of state) I'm pretty much resigned to the possibility the inmates will be running the asylum in 2011 in DC.
...
written by izzatzo, September 04, 2010 8:41
Vote for me. I'm for Bipolar Freedom. I believe in overwhelming Command and Control of all sorts of freedoms. It's not the country that I fear. It's the government. It's out of control.

It won't be long now. Financial Armageddon is on the horizon. Taxes to finance Obama's deficit will put America in debtor prison as far as the eye can see. It's the next death panel.

I know because I have special military binoculars that can see miles in the dark. I'm trained in Situational Awareness and the only solution is to deploy a Secure and Hold strategy accompanied with a Stimulus ... I mean a Surge, otherwise known as a Balanced Budget which proved successful in Iraq.

Once I am in office, unemployment will be solved by my Hearts and Minds Jobs Strategy from the supply side, not the demand side, kicked off with a Predator Drone Surgical Tax Cut program for the ultra rich.

Change must come from within, not from the government. There is work available. You just have to find it like the Afghans and Iraqis did after attending our drill instruction and freedom cheerleading sessions.

I know, because I've worked for the government all my life defending Bipolar Freedom. The government never produced a single job, product or service. It's all produced by taxpayers, like my Command and Control job, which I took voluntarily as a heroic lifetime sacrifice to support Bipolar Freedom everywhere.

Vote for me and I will save you from government.
Talk is cheap
written by AndrewDover, September 04, 2010 9:31
Medical, Homeland Security, and military spending is out of control.

We will soon see if Congress can resist the attempt to extend the Bush tax cuts.
...
written by J. Miller, September 04, 2010 10:05
... And I'm sure you've seen their acknowledged editorials. They're at it again on Social Security, and sympathizing with the Wall Street Whiners.
...
written by +, September 04, 2010 12:30
wow. that was a scorching rebuttal. I fell sorry for the writers.
The working class and the employing class have nothing in common.
written by Scott ffolliott, September 04, 2010 1:51
"The working class and the employing class have nothing in common. There can be no peace so long as hunger and want are found among millions of the working people and the few, who make up the employing class, have all the good things of life."
Dean - have you seen this?
written by barrythompson, September 05, 2010 7:26
"what we need is a fiscal expansion (e.g. a temporary and large cut of sales taxes) that does not raise public debt in equal
amount. This can be done with a “helicopter drop” targeted at the Treasury. That is, a monetary gift from the Fed to the Treasury." Ricardo Caballero, MIT economics department.

http://www.businessspectator.com.au/bs.nsf/Article/treasuries-bernanke-federal-reserve-bonds-fiscal-p-pd20100831-8U4HZ?OpenDocument
...
written by zinc, September 05, 2010 10:24
"Some fiscal hawks are skeptical that either party is willing to make the unpopular decisions necessary to restore the country to fiscal health."

What about expiration of the Bush Tax Cuts, massive reduction in defence spending, and anti-mercantist trade policy ?

The fourth estate is broken. Michael Powell and the gang at the Bush FCC really fixed things up nicely, didn't they ?
Keep hacking away at the Neocon "Washington Consensus"
written by J Snow, September 05, 2010 11:23
I guess I have been clueless all these past 30 years. I thought Reaganomics was some sort of new form of voodoo economics that Reagan's economists cooked up to devolve the US economy into a two class society - rich and poor.

The Corporate Media has done a marvelous job in the past 30 years of hiding the true architect of the Reagan neo-fascist revolution - Uncle Milty, better know as Milton Friedman.

Of course The Washington Post would be spouting the Washington Consensus drivel as gospel truth. These are the same people who shamelessly endorsed George W Bush's theft of the 2000 and 2004 elections through ballot fraud and US Supreme Court abuse of power.

Anyone and everyone who reads Dean Baker's message is impacted. If you are an open minded person, you read Dean Baker and say, "damn, that man is absolutely right and we are being screwed by these neocons." If you are a neocon, you say, "damn, that Dean Baker is a communist who needs to be shut up permanently." If you're a neocon wannabe, you say, "damn, that Dean Baker is ignorant and has no idea what makes this country great."

All these 20-somethings are texting like crazy. Attacking the Corporate Media by speaking truth to power spreads like wildfire.

So keep up the great work, Dean Baker! All those government weenies who read their Washington Post bible as Gospel Truth will be changed by their 20-something children. Obviously it makes no sense to spend $160,000 for a college education when you can't get a job after you graduate. These kids get it! They don't buy the neocon Washington Consensus drivel.

Massive unemployment is bad - period!
...
written by liberal, September 05, 2010 4:12
AndrewDover wrote,
Medical, Homeland Security, and military spending is out of control.


Unfortunately, you're right. And that stuff is all practically untouchable, politically.
What is the rationale for a high dollar..?
written by David, September 08, 2010 12:37
I must agree with you that the unnaturally high value of the dollar has a lot to do with the trade deficit...China sends us electronic gizmos and Walmart junk, we send them dollars, and they lend the dollars back to us, and charge us interest for the privilege

Of course, when you describe simply like this, it is apparent to anyone that this arrangement sounds like a ponzi scheme, which eventually will fall apart.

But what IS the rationale for a high dollar. If it is so bad for the economy, and so bad for economic independence of the US economy, and in the long run, bad for jobs and consumers, then why maintain a high dollar?

I suppose it has something to do with the interests of international speculators and hedge funds, but I really don't understand the logic FOR a high dollar?

Could you devote an note to explain it, or a link that would shed some light on this?

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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.

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