NPR Justifies Its $211 Trillion Debt Scare
|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.