October 21, 2022
Correction: Okay, this is a big blunder on my part. The full projected cost of the student loan debt forgiveness actually was included in the 2022 budget. I had not considered the possibility that this was the case since it implied the deficit for fiscal 2022 was under $1 trillion, without this accounting. Since there was still considerable pandemic-related spending in this fiscal year, that has not occurred to me as a possibility. This means that apart from this accounting peculiarity, the deficit fell from $2.8 trillion in 2021 to $1.0 trillion in 2022, a decline of 64 percent.
The New York Times continued in its trashing of the economy under President Biden, implying that the 40-year cost of his student loan forgiveness plan will be incurred over a single year. An article reporting on the sharp drop in the deficit in fiscal year 2022, which just ended at the start of the month, included a quote from a statement by Maya MacGuineas, the president of the Committee for a Responsible Federal Budget:
“In fact, the deficit would have been almost $400 billion lower had the Biden administration not decided to enact an inflationary, costly, and regressive student debt cancellation plan in August, ….”
This is not true, as every budget expert knows. The $400 billion figure refers to the Congressional Budget Office’s estimate of the cost of debt forgiveness over the next forty years, not its cost in fiscal year 2022, which was in fact zero.
Since most people probably do not have a good idea of how much $400 billion over forty years is, if the NYT was interested in informing its readers, it could have expressed the sum as a share of GDP. According to the CBO projections, the cost of forgiveness peaks at a bit more than 0.09 percent of GDP in the years 2023-25. That is less than one-thirtieth of the military budget. It falls to around 0.07 percent of GDP by 2032 and then drops further to 0.02 percent of GDP by 2042.
The piece also includes the bizarre complaint that “Treasury Department figures released earlier this month revealed that America’s gross national debt exceeded $31 trillion for the first time, a milestone that the Biden administration did not observe with any fanfare.”
First, since debt has almost always risen in the 80 years since the start of World War II, every debt number we hit will be “for the first time.” It’s not clear why the NYT felt the need to include these words.
It is also bizarre that they see $31 trillion as some important milestone that they criticize the Biden administration for not acknowledging. After all, it didn’t acknowledge hitting $30,897,300 million either.
We have a right to expect more serious budget reporting from the country’s leading newspaper.