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Home Publications Blogs Beat the Press Peter Peterson's Fiscal Times Blesses Deficit Reducers as Being Non-Ideological and Washington Post Concurs

Peter Peterson's Fiscal Times Blesses Deficit Reducers as Being Non-Ideological and Washington Post Concurs

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Sunday, 20 June 2010 07:26

On the last day of 2009 (yes, coincidentally December 31st), the Washington Post departed from standard journalistic practice by running material produced by the "Fiscal Times" in its own news section. The Fiscal Times is a news service funded by billionaire investment banker Peter Peterson. Peterson has been working to gut Social Security and Medicare for at least two decades, starting and funding a wide variety of organizations that have this as their purpose.

The Fiscal Times is Peterson's latest creation in this line. He had his kid hire some of the journalists displaced by the collapse of the newspaper industry to put it together. While most newspapers would not publish as news material produced by an organization with such a clear agenda, the Washington Post apparently had few concerns along these lines.

Today the Post ran a piece from the Fiscal Times that glorified the efforts of two members of President Obama's deficit commission who are trying to push through a plan that is likely to involve substantial cuts to Social Security and Medicare, the country's most important social programs. The piece implied that the two members who accepted the view that it is necessary to reach an agreement on reducing the deficit in the current political environment are getting beyond ideology. In contrast, those who think it is important to protect social programs that virtually the entire working population will depend on in retirement are somehow being ideological.

It told readers that: "On the fiscal commission, Stern [Andy Stern, former head of the Service Employees Internation Union, one of members highlighted in the peice] is already looking for ways to break through the ideological camps on deficit-reduction." In fact, individuals who are not motivated by ideology would note that the country's projected long-term deficit problem is driven almost entirely by the broken U.S. health care system.

If per person health care costs were the same in the United States as in any other wealthy country, then the projections would show huge budget surpluses rather than deficits. It also should be possible for the people in the United States to take advantage of lower-cost health care systems elsewhere, even if the power of special interests like the insurance and pharmaceutical industry prevent reform here. This basic fact should feature prominently in any discussion of the long-term deficit that is not motivated by ideology. It is never mentioned in this piece.

The article also treats an assertion from Mr. Stern as a basic fact: "Now Stern argues that deficit reduction isn't simply a conservative issue. 'What I keep saying to the progressive community is that when the crisis hits, it's students, workers and poor people who pay the price.'"

Of course, the crisis has hit - the country is facing its worst downturn since the Great Depression. While students, workers, and poor people have paid the price, this is entirely the result of politics. The government quickly moved to rescue the major banks, using vast amounts of public money to save Citigroup, Goldman Sachs, Morgan Stanley and Bank of America from bankruptcy. At the same time, it has refused to spend enough money to boost the economy back to full employment levels of output or take serious steps to prevent people from being thrown out of their homes.

However, the decision to protect the wealthy rather than students, workers, and poor people was entirely a political decision. The banks were able to use their political power to ensure that they got the resources needed to prevent their collapse. On the other hand, those not interested in helping students, workers, and poor people began to highlight concerns about deficits in order to head off additional spending. It may always be the case that the wealthy will dominate the political process to the extent that they do today, but it is worth pointing out that it is politics, not economics, that determines who suffers in a crisis.

Comments (5)Add Comment
...
written by John Emerson, June 20, 2010 9:24
The role of Andy Stern in this puzzles me. I know little about him except that he was the head of SEIU and that SEIU was a Democratic stalwart, with various rumors and accusations floating around about him. There's got to be a story about why he's saying those things.
Soak the rich
written by bakho, June 20, 2010 9:55
Peterson clearly does not pay his fair share of taxes and wants to avoid having to support the very economy that enabled him to become wealthy in the first place.

The estate tax cannot make its return soon enough.
...
written by izzatzo, June 20, 2010 11:23
The piece implied that the two members who accepted the view that it is necessary to reach an agreement on reducing the deficit in the current political environment are getting beyond ideology. In contrast, those who think it is important to protect social programs that virtually the entire working population will depend on in retirement are somehow being ideological.


It's critical to get beyond ideology, for example, the Tax and Spend ideology that just keeps driving up debt with more taxes and spending. Alternative ideologies, like Starve the Beast ideology can be superior in a recession, which spends way more than taxes taken in to act as stimulus spending.

Then there's Clinton Zero Sum ideology, where taxes are matched with spending to maintain a balanced budget with a zero deficit, or Sure 'Nuf Zero Sum ideology where the debt is paid down with surpluses until it reaches zero, otherwise known as Ain't Gonna Happen Greenspan ideology because government will just spend the surplus.

Finally there's Boy Monarch Bush ideology that starts a useless war then enacts a tax cut that adds $1.3T to the deficit for a total of well over $2T added to the debt, also known as Supply Side Gotcha Backfire ideology or "stimulus braking", sort of like stagflation with the foot on the pedal and brake at the same time.

The next issue of Peterson's "Fiscal Times" is expected to have a special feature on why Starve the Beast ideology is not working because the stimulus is creating too many jobs rather than adding enough crippling debt to bring down the economy and put the Republicans back in office.

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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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