Media Villager GOP-Spin On The Federal Deficit

Posted by AzBlueMeanie:

It seems all the media villagers were engaged in creative headline writing this morning to focus on the federal deficit rather than focus on what is important to the American people — job creation. "Mr. Boehner, where are the jobs?"

The AP’s headline reads, “CBO: Debt crisis looms absent major policy changes.”

The Arizona Republic's headline reads "Agency predicts explosion of debt."

The Arizona Daily Star's headline (oddly enough, no online link) reads "CBO warns of European-style debt crisis in US." (This is similar to a CNBC.com headline U.S. Could Face European-Style Debt Crisis: Congressional Report – CNBC).

The media villagers' message is clear: "The sky is falling! The sky is falling!" The lede: "A new report says that the national debt is on pace to equal the annual size of the economy within a decade, levels that could provoke a European-style debt crisis unless policymakers in Washington can slam the brakes on spiraling deficits."

You have to read well down into the article to get to the salient paragraph:

CBO's projections are based on a scenario that anticipates Bush-era tax cuts are extended and other current policies such as maintaining doctors' fees under Medicare are continued as well. The debt would [be] far more stable under the budget office's official "baseline" that assumes taxes return to Clinton-era rates and that doctors absorb unrealistic fee cuts.

Take away: If we continue GOP economic policies the federal deficit will explode. So what happens if Americans finally come to their senses and "just say no to GOP economic policies"?

Steve Benen has the answer at the Political Animal – The story behind the CBO’s warning:

Putting aside the question of whether a European-style debt crisis would result if the debt reached 100% of GDP — there’s ample reason for skepticism — it’s worth emphasizing that the AP’s headline is largely backwards.

“Absent major policy changes,” deficits will shrink quite a bit. As Ezra Klein noted:

[The CBO’s long-term budget outlook] shows the same thing as always: If Congress lets the Bush tax cuts expire or offsets their extension, implements the Affordable Care Act as scheduled and makes or offset the Medicare cuts prescribed by the 1997 Balanced Budget Act — which CBO calls the “extended baseline scenario” — the national debt will be totally manageable.

If Congress passes laws extending the Bush tax cuts without offsetting the cost, repealing the Affordable Care Act and its cost controls and protecting doctors from Medicare cuts without making up the savings elsewhere — the “alternative fiscal scenario” [the "GOP scenario"] — the national debt will be totally out of control.

I don’t doubt Republicans will seize on the CBO report and say, “See? We have to prioritize debt reduction immediately.” But party officials simply won’t consider a basic fact: if we do as Republican leaders demand, the debt they pretend to care about — the debt they largely created during the Bush era — gets much worse.

If we do nothing, on the other hand, the budget deficit shrinks a lot. As Annie Lowrey recently explained, “[D]oing nothing allows all kinds of fiscal changes that politicians generally abhor to take effect automatically.” David Leonhardt added, “As federal law currently stands, some significant tax increases are set to take effect in coming years.”

This isn’t popular to say, but if policymakers simply leave the status quo in place, and let nature take its course, taxes will return to Clinton-era rates, the Affordable Care Act will save us a lot of money, and the deficit will shrink considerably.

“Absent major policy changes,” the problem gets a whole lot better. The fact that the CBO helps prove this point today is worth keeping in mind.

In other words, "Just say no to GOP economics" and the federal deficit will automatically be reduced. GOP economic policies are actively undermining our fiscal condition and our economy. Why does anyone take these fools seriously? Why is anyone still listening to what they have to say? It is all "voo-doo economics" nonsense. Or as Naomi Klein argues in The Shock Doctrine: The Rise of Disaster Capitalism, it is a manufactured crisis to benefit a very few wealthy powerful individuals.

UPDATE: The CBO juxtaposed these two alternative futures in a pair of graphs and, just as last time, it projects that deficits will disappear entirely by the end of President Obama's second term (if he gets a second term) if Congress were to just sit on its hands and do nothing.

 
h/t talkingpointsmemo.com