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Home Publications Blogs Beat the Press The Jerry Springer Show on the Washington Post Opinion Pages

The Jerry Springer Show on the Washington Post Opinion Pages

Tuesday, 15 January 2013 06:07

Jerry Springer made himself famous by having a television show in which he encouraged people to say and do outrageous things. The Washington Post applies the same standard to people who rant about the debt and deficit on its opinion page.

Today's entry is from Marc Thiessen, who argues that the deficit is out of control due to excessive spending. Of course as all budget wonks know the reason that we have large deficits today is that the economy plunged after the collapse of the housing bubble. In fact, one of the best pieces making this simple point was written by the Post's own Evan Soltas.

The economic downturn caused tax collections to plummet and led to an increase in benefit payments for items like unemployment insurance. It also led to deliberate efforts to boost the economy with temporary tax cuts, like the payroll tax holiday and temporary spending measures. However, the structural deficit is little changed from what it was before the economic downturn when the debt to GDP ratio was falling.

But hey, when it comes to discussions of debt and deficit the Post doesn't have time for numbers. Let's see some chairs flying, it's the WAPO opinion pages!

Comments (8)Add Comment
written by Chris Engel, January 15, 2013 6:23



government borrowing costs = near all-time lows
foreign exchange value = stable throughout the financial crisis and QE and all that
inflation = ridiculously low, bordering on DEFLATION (we got negative TIPPS)

WHERE are the warning signs for all the horrible things Republicans are screaming about?

I mean, i would be on their side 100% if there was actually evidence that the things they are concerned about are causing any real problems. But we're not "overspending" because the economy is way too cold to be reaching inflationary problems, which is the only reason why we would want to limit spending anyway. So, what does "overspending" mean to these people and why is it bad if that's what we're doing now and it's not causing problems associated with overspending?

And the debt that has been piled up hasn't done anything to lead to increases in cost of borrowing in Treasuries (since investors merely view them as a safe storage of dollars). In fact, rates are just getting lower and lower the more debt we pile up. If the debt was for some reason leading to a spike in rates, I would also be on their side! But there is no evidence of any ills...the economy still has unemployment at unacceptably high levels and wages and growth are stuck, and if you think those things are happening because of TOO MUCH spending, then wake up! Market participants aren't spooked by high debt and thus not hiring or spending/investing (it's because of low demand!), high debt is not a bad thing per se, high debt is bad if the interest you're paying on it is going up and it's not manageable. But when you're a government and you create money through going "into debt" (issuing Treasury securities) this is NOT a problem.
written by VicJane, January 15, 2013 7:23
The assertion that the deficit is from spending alone is made repeatedly without challenge orally as well as in writing. Just now on MSNBC's Morning Joe, Joe Scarborough held forth on that theme seated next to the token Democrat (Mika Brzezinski) who made no rejoinder or critique. We have lost the propaganda war.
hmmmm tax v spend, do the math...
written by pete, January 15, 2013 8:37
in 2006 $2.4T in taxes, $2.6T in spending.
in 2012, $2.4T in taxes, $3.8T in spending.

written by Chris Engel, January 15, 2013 8:46

The revenue would have been higher if we didn't change the tax structure in response to the financial crisis.

Spending was also higher than expected to soften the blow.

It's normal for spending to grow annually, view the historical data. Spending is how we add demand into the economy, and money is created and given to the government to spend, so it's key to the growth of our economy.

If we don't constantly increase the money supply we'll get deflation and that's a lot worse than moderate inflation, which is something we're in dire need of to reduce unemployment.
And who authorized all that spending? Congress!
written by Ernie, January 15, 2013 8:56
What I keep NOT hearing is that it's not the President who spent all that money, but Congress! Sure, it takes both branches of government to authorize and spend the money, and House Republicans are frustrated that they cannot control the budget unilaterally, but welcome to Democracy! You don't always get your way!
Chris...who's blows have been softened...
written by pete, January 15, 2013 9:19
There's like 20% inner city youth unemployment...and folks are leaving the workforce in droves...I see little comfort out there at all. A wopping $1.5T in deficit spending for several years, a Keynesian Nirvana, seems to have done zip.

Since the 60s, spending has climbed, as you say, normally. That has been accompanied by flat wages.

Finally, er, money is not given to the government. The treasury sells bonds, borrowing money like GM does. Sometimes the Fed buys them. Sometimes the Fed buys Fannie and Freddie stuff. Typically, the Fed doesn't drop money from helicopters or whatever. There are calls for the Fed to vastly overpay for some platinum, but this has been dismissed. Different in other countries for sure. Ex. Argentina, once held as the shining example for Greece to follow by Dr. Baker, is now a shambles with 20% inflation.
Thiessen is a sick psychopath
written by Brett, January 15, 2013 9:25
He's a torture apologist that goes beyond just apologizing -- he actually craves and possible is sexual stimulated by thoughts of the US government torturing detainees. Just google his interview with Jon Stewart and see if you can watch it without your skin crawling.

This guy doesn't care about all about evidence. He just makes things up. Every argument he has for his pro-torture stance is just invented out of thin air. Unsurprising he knows nothing about the budget.
The Treasury DOES NOT borrow like GM does ; Argentina
written by Calgacus, January 17, 2013 7:31
Pete: Finally, er, money is not given to the government.
No, the government gives money to the private sector. The base money of our economy is government debt. The government creates money out of nothing.

The treasury sells bonds, borrowing money like GM does.

No. A fundamental mistake. What is called "government borrowing" IS. NOT. BORROWING. The US government is the monopoly supplier and redeemer of both currency and government bonds. It doesn't need to get them from anyone.

It is not at all the same thing that GM does when it sells bonds. The equivalent transaction for GM would be GM selling at a discount "future car credits" NOW, in return for a currently-redeemable "car credit" - which GM is the monopoly supplier/final redeemer.

Realistically, say they had promised you a car at some date, and you had paid them. But they couldn't or don't want to fulfill the promise with your preferred car - so they offer a better deal for a later car delivery. This is not GM borrowing from you. It might cause increased savings of "car credits" - a germ of the idea that raising interest rates decreases the money supply, disinflates.

Finally - Argentina is a shambles?!? Greeks and many other Europeans would love to have Argentinian- quality economic performance. Whoop-de-doo about inflation. Uncharitable overestimates, whatever, by Latin American standards 20% would often be super-sound money. What matters is unemployment, growth and quality of life. Who knows, maybe the USA will envy Argentina too, pretty soon.

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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.