New York Times Gets It Fundamentally Wrong on the Budget Impasse

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Monday, 31 December 2012 06:38

The NYT doesn't seem to keep up to date with writings on the budget deficit even in its own paper. As I have often pointed out, the large budget deficits of recent years are entirely attributable to the plunge in the economy caused by the collapse of the housing bubble. Paul Krugman has recently been harping on this point in his NYT column and blog. For this reason, its news story claiming that:

"Years of increased spending on everything from wars to expanded entitlement programs — combined with protracted, stubborn unemployment and a nation of workers whose earning power and home values have plummeted in recent years — have persuaded lawmakers in both parties that fiscal policy is the most pressing domestic concern."

Of course the "years of increased spending" would be beside the point if it were not for the economic downturn. The NYT badly misled its readers in making this assertion.

The article also misled readers in the next sentence which asserts:

"But a fundamental ideological chasm between the majority of lawmakers and an empowered group of Congressional Republicans — fueled by some Tea Party victories in both chambers in 2010 — has made it more difficult than ever to reach fiscal and budgetary compromises."

Actually, the vast majority of Tea Party backers agree with the vast majority of Democrats in their opposition to cuts in Social Security, Medicare, and Medicaid. The main difference is that the Tea Party backers seem to believe that there is some other area of government spending, other than defense, that can be cut back to reduce or eliminate the budget deficit. Of course this is not true. However the nature of the gap between most Democrats and Tea Party backers is informational, not ideological.

This makes the position of Republicans in Congress especially difficult. They need to produce spending cuts, but not in the programs that the Tea Party backers support and often depend upon. Since this is not possible, it makes the politics very hard for them.