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Home Publications Blogs Beat the Press Washington Post Is Confused on the Origins of the Deficit

Washington Post Is Confused on the Origins of the Deficit

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Tuesday, 22 January 2013 05:46

It told readers:

"The country faces a fast-growing national debt as a result of waves of retiring workers who expect health care and pension benefits."

This is not true. The reason the debt has been rising rapidly in recent years is that the economy plunged due to the collapse of the housing bubble. In 2007, before the collapse, the deficit was just 1.2 percent of GDP and the debt to GDP ratio was falling. The Congressional Budget Office projected that the deficit would remain in this neighborhood well into the current decade, even if the Bush tax cuts were not allowed to expire.

deficits-per-GDP-10-2012

Source: Congressional Budget Office.

Comments (2)Add Comment
Media confusion
written by R Pinkus, January 22, 2013 7:53
You can't write too many articles like this one.

Every media outlet, nearly every newscaster or commentator says the same thing. Retiring boomers will drive up the national debt.

What they are really saying is,

"Since incompetent bankers crashed the economy and the federal government had to bail them out with Trillions of dollars of tax payers' money (there are still unlimited loan guarantees to banks from the US Government), the national debt is now so big we have to cut back on social security payments to individuals."

If they were clear about what's really happening, people wouldn't stand for it.
Of all the unmitigated nerve ....
written by John Puma, January 22, 2013 11:01
of those "retiring workers who expect health care and pension benefits."

Who the flyin' eff do THEY think THEY are?

They have served their official time under their corporate lords now they have one more function for the high priests of profit.

Grind them into fertilizer to grow our precious GMO corn and soybeans.

(Arrogant twits!)

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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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