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 Caveat lector 13 September 1999 Our current howler (part III): Fiscal omerta
Synopsis: No fiscal argument, no matter how bogus, gets challenged by the mainstream press. What do we tell our kids when it's back-to-school week? Cut the clowning and get back to basics. And maybe our technically limited press corps could consider the same advice too. This past summer, Jeff Birnbaum started clowning around, then couldn't explain his basic lessons (links below). And Bill Sammon, inventor of canoe story nonsense, has been having problems with that "lockbox" thing too: SAMMON AND GODFREY: "The truth is congressional Republicans have already locked away the...surplus to strengthen Social Security and Medicare," and plan to pay off $2.2 trillion in debt over the next decade, Mr. Hastert said. [Sammon's deletion] Do you see why our Cody caller is confused by the lockbox? Sammon makes it sound like Hastert is doing two separate things—locking away the surplus to strengthen SS, and also reducing the debt. But that's not how the lockbox works at all. Meanwhile, William Welch—who doesn't clown around with bogus stories—was able to explain it (same day): WELCH AND BENEDETTO: Congressional Republicans contend they are devoting nearly three-fourths of projected federal budget surpluses over the next decade, including all that come from excess Social Security payroll taxes, to pay off national debt and thus indirectly strengthen Social Security. Instructive, isn't it? How scribes who waste time on gossip and spin have so much trouble reciting their basics? (See THE DAILY HOWLER, 9/9/99 and 9/10/99, for our reports scolding Birnbaum-on-lockbox. For Sammon-on-canoe, see postscript.) But then, the press corps is frequently over its head with the simplest fiscal topics. In 1995 and 1996—for two solid years—it failed to clarify the seminal Medicare discourse; for more than a decade, the press has created mass confusion when it explains the Social Security "trust fund" (see tomorrow's DAILY HOWLER). To all intents and purposes, there is no fiscal argument so bogus or false that the press corps will ever challenge or correct it. To do so would require a technical competence normally lacking in the corps. And it would require our scribes to correct other scribes—and that is simply not done in this group. And so Bruce Bartlett found himself making this presentation last month—a presentation found all through the press as the GOP pushes for tax cuts: BARTLETT: [E]ven with the proposed $792 billion tax cut...federal revenues will continue to be at record levels...Since 1995, federal revenues have been at their highest level in American history. Bartlett points out that federal revenues averaged 18.6% of GDP "during the entire period after World War II prior to the Clinton presidency." In 1992, federal revenues took 19.2% of GDP. But during the first six years of the Clinton administration, they have averaged 20.5%, he states. And he is hardly alone in citing this statistic: DOUG BANDOW: As a result [of the Bush and Clinton tax increases], Americans now face the highest peacetime tax collections ever, 20.6 percent of the gross domestic product. Stephen Moore did some rounding: MOORE: The federal tax rate has increased from 18 percent to 21 percent of GDP in just the past six years. Time alerted its readers too: GREENWALD: As a Wall Street Journal editorial-page headline framed the issue last week, WHOSE SURPLUS IS IT ANYWAY? Indeed, Americans now pay an amount in taxes equal to 20.7% of GDP, a post-World War II high that is up from just over 18% ten years ago. Stop us before we quote more. The cited figures are perfectly accurate, but the presentation is grossly misleading. In making this presentation, writers implicitly use tax receipts, rather than expenditures, to measure the size of the government. The implication? Ol' debbil government is gettin' bigger and bigger. But the principal reason receipts are higher is because the federal government is no longer borrowing. We tax-payers now are paying full fare, not throwing off debt on our kids. Why were tax receipts lower through the early 90s? Because the government was borrowing so much. In 1992—a year Bartlett cited—the following profile obtained: Federal receipts: $1.09 trillion The federal government borrowed 21% of its budget. Anyone can keep federal tax receipts down if he's willing to finance like that. If we had anything resembling a real public discourse, you'd have seen this point made before this. Various scribes would have spoken up, and pushed the current tax debate forward. Instead, the mainstream press corps gossips about Hillary, and the ideological press corps churns out favorite facts—including facts that grossly mislead, like this misleading fact about taxes. Why do we have this kind of discourse?" We don't want to guess about motive. But this press corps typically lacks fiscal competence—and mainstream scribes don't correct other scribes. And the mainstream press corps simply loves to gossip. Who has time to construct a real discourse when their time is taken up doing that? But the granddaddy of all the bungled basics is that nagging Social Security trust fund. They've created confusion around that one for years. We'll take a quick look back tomorrow.
Tomorrow: Five papers described the SS problem. In fact, they described it in five different ways. Visit our incomparable archives: Bill Sammon does know his canoes. See THE DAILY HOWLER, 7/30/99 and 8/4/99.
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