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Home Publications Blogs Beat the Press NPR Justifies Its $211 Trillion Debt Scare

NPR Justifies Its $211 Trillion Debt Scare

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Friday, 26 August 2011 15:11

It is the media's responsibility to inform the public about the key issues affecting their lives. One of the key issues is the economy. At the moment more than 25 million people are either unemployed, involuntary working part-time, or have given up looking for work altogether. The reason is that the folks running the economy somehow could not see the $8 trillion housing bubble that eventually collapsed and took the economy down with it.

One way to get people back to work is government stimulus. This could be spending on various items, it could be tax cuts, or it can (and usually is) some mix. However, stimulus does cause deficits. This brings us to an NPR story that told us the real debt was not the widely advertised $14.3 trillion debt subject to the debt ceiling, but rather $211 trillion.

The implication is that we shouldn't be worried about putting people back to work, we should be worried about cutting the deficit. And by the way, that may also mean taking an ax to Social Security and Medicare.

I blogged on this story when it ran a couple of weeks ago and called it cesspool journalism. The reason is that it's only purpose could be to frighten people about the deficit. It could not possibly be to inform since it is almost inconceivable that anyone hearing or reading this story would have any clue of how this $211 trillion debt figure was derived.

The methodology used for the calculation is obscure and used by almost no one except Lawrence Kotlikoff, the economist who developed it, and a few of his former students. For example, the debt figure is based on the assumption that no one not currently in the work force ever pays taxes. It also conceals a projected explosion in private sector health care costs whereby it will cost an average of $40,000 a year in 2030 (in 2011 dollars) to provide care to an 85-year old. By 2080 this number will exceed $100,000 a year (also in 2011 dollars). These are among the reasons that almost no one other than Mr. Kotlikoff uses this methodology.

NPR ombudsman took up my blognote and turned to Weekend All Things Considered Supervising Senior Editor Rick Holter for a response. In essence, Mr. Holter's response was that NPR had aired the views of people less hawkish on the deficit, like Paul Krugman and Peter Diamond (I have also been NPR talking about the deficit), so it was reasonable to include an extreme deficit hawk like Kotlikoff.

The question of devoting a segment to Kotlikoff is not simply one of balance, although I would argue that NPR has been seriously unbalanced in its coverage of the deficit in general and especially in the last few months. The issue with Kotlokoff is that the piece could not have provided information to NPR's audience. There was almost no way that anyone who is not a policy analyst working on budget issues would have the ability to assess Kotlikoff's $211 trillion number. This was about scaring people, not informing them.

There's nothing wrong with having Kotlikoff present his views on NPR. But the station has the responsibility to ensure that it is done in a context where it is providing information, not just spreading scare stories. This piece only did the latter.

Comments (10)Add Comment
Neo-con Propaganda Radio
written by nassim sabba, August 26, 2011 5:55
I stopped listening to NPR that is a neo-con, pro-war front in the guise of a "publicly supported" entity. I would like to see an independent audit of their fund raising. My suspicion is that they get tons of money from corporation and pretend to be raising "independent pennies" from listeners.
They lost their credibility long ago in the run up to the attack on Afghanistan and the attack and invasion of Iraq.
It is irritating, but they are just as bad as FOX in their goal, but far more subtle and subversive in putting neo-con thoughts into the mind of those who consider themselves liberals. They report on organic goat milk to cover up their organic goat .... that they follow it with.
When One is Up to One's Neck in Alligators One Doesn't Worry with Flies
written by izzatzo, August 26, 2011 8:35
In a study of debt scaredy cats subjects presented with a change in the debt from $100T to $200T reported no change in fear, explaining that their returns to fear had flattened out to zero diminishing returns long ago due to ASD (Attention Surplus Disorder) from Teabagging Fear Mongers crying wolf every time the Fed prints money and the price of gold goes up.

Boo!

Stupid liberals.
$14 T or $211T, WTF is the difference?
written by Paul, August 26, 2011 9:05
The U.S. government can print all the money it needs at anytime it needs it. We are not on the gold standard people!

All these fear mongering asshats need to get a life.

Stupid Conservatives!
Big projections
written by AndrewDover, August 26, 2011 9:30
Laurence J. Kotlikoff:
"If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That's the fiscal gap," he says. "That's our true indebtedness."

The $211 is pretty useless unless you understand how it was calculated and over what time period. But contrary to Dean's "the debt figure is based on the assumption that no one not currently in the work force ever pays taxes.", the unobscure claim is that it does include future taxes.

"We've got 78 million baby boomers who are poised to collect, in about 15 to 20 years, about $40,000 per person. Multiply 78 million by $40,000 — you're talking about more than $3 trillion a year just to give to a portion of the population,"

overstates the SS Trustee's projection of $2.8 trillion in 2035.
http://www.ssa.gov/OACT/TR/201...tml#201773

And of course they also project $2.2 trillion in social security taxes by 2035.


...
written by diesel, August 27, 2011 11:32
$211,000,000,000,000? I don't know about you guys, but I'm going long on wheelbarrows.
Wheelbarrows for sale
written by Dean, August 27, 2011 12:24
Diesel,

I will be happy to sell you as many wheelbarrows as you want. That's what we have to do deficit hawks, rip them off.
Npr Fair and Balanced
written by Steve Lightner, August 27, 2011 2:17
I am also an ex-listener of NPR. Apparently they gave up journalism for balanced reporting no matter how unhinged one side of the argument is. Whatever happened to reporting the truth even when it is inconvenient? This kind of balance doesn't inform listeners, it misinforms them.
baloney vs. baloney
written by Peter, August 27, 2011 2:24
How about proofreading your blog posts? Then we can discuss content.
Mr.
written by Jim Richard, August 27, 2011 3:16
It is good these negative comments are from "former" NPR listeners. They probably didn't contribute to NPR either.
Balance over Fairness
written by Guest, August 27, 2011 8:45
NPR has joined the lazy Washington "balance" crowd. "One side says the world is flat. The other side says it's round. You decide."

Journalists should adopt a standard of fairness and accuracy. Give different sides their due, but report accurately on what the objective situation is as you see it. That will actually inform the audience.

Listening to NPR's economic coverage leaves the listener less informed about economics than the non-listener. At least non-listeners are not being fed the standard political orthodoxy, unless of course they watch cable news.

NPR is bending over backward to become a respected part of the Beltway establishment. So don't expect an accurate portrayal of events from them.

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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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