Feeds: 
symbol identifies content for paid subscribers only.
CNN Money Takes Strong Editorial Stand on the Budget in News Section
CNN Money decided to highlight the fact that when the debt increases, interest payments will rise. While those familiar with basic arithmetic probably already understood this fact, CNN Money decided that this is big news.
To make this fact more newsworthy, CNN Money decided to say some things that were untrue and some that were meaningless. In the untrue category we get the shocking fact in the subhead that: " the interest Americans will have to pay to keep the country running over the next decade will reach unheard of levels."
Actually, those of us old enough to remember back to the 90s have heard of these levels of interest payments.
The Congressional Budget Office projects that interest payments will average 2.4 percent of GDP over the next decade. By contrast, interest payments averaged 3.1 percent of GDP in the decade from 1985 to 1994.
In the dramatically irrelevant category, CNN Money told us that: "more than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest." Hmmm, what on earth is that supposed to mean? Defense spending over the next decade is projected to be equal to more than 80 percent of the debt. I have no idea what this comparison is supposed to tell people. If we didn't have to pay interest on our debt, we could go more than halfway to balancing the budget over the next decade? If we got rid of the defense budget, then we could almost completely balance the budget.
This ranks high in the level of silliness. CNN Money should have gotten a large contribution from the Peter Peterson Foundation or one of the other advocacy groups trying to scare people about the deficit for this piece. This certainly is not a news story.
--Dean Baker
COMMENTS (4)
Sure, you should take the interest numbers in context, but the CBO quote is:
"Relative to GDP, net interest is projected to almost triple climbing from 1.4 percent in 2010 to 3.4 percent by 2019."
These numbers are under the dubious assumption that the Bush tax cuts are repealed in full in 2011 when the CBO projects an unemployment rate of 9.1%.
CNN's statement: "the interest Americans will have to pay to keep the country running over the next decade will reach unheard of levels." is literally true (2019) unless paying 1.060 trillion dollars in interest in 2019 as projected by the CBO sounds familiar to you.
No need to panic if we raise taxes if interest rates start to rise, and cut out some of the non-essentials like land wars in asia, and trying to prop up housing prices.
Posted by: AndrewDover | November 20, 2009 6:53 PM
It is truly a painful experience to watch the stupidity of our society over-take the brilliance of the last (FDR) generation.
Now the fools worry about the catastrophic effects of GW, the Gramms, the Doles, etc. Just wait, we ain't seen nothing yet. Look at the republican Mormon from Searchlights' bill. The only thing in there is forced coverage. Yea Harry, you wimp.
Posted by: zinc | November 20, 2009 11:02 PM
Can libhomo explain how even doubling income taxes is going to bring this budget into balance ?
Receipts by source for fiscal year 2009
915 Individual Income Tax
890 Social Insurance and Retirement
138 Corporation Income Taxes
62 Excise Taxes
51 Misc Receipts
23 Estate and Gift Taxes
22 Customs Duties
2104 TOTAL
Outlays by agency for fiscal year 2009
796 Health and Human Services
727 Social Security Adminstration
703 Treasury ( )
636 Defense-Military
190 Net Interest
138 Labor
114 Agriculture
95 Veterans Affairs
61 Housing and Urban Development
57 Defense Civil Programs
53 Education
51 Homeland Security
3521 TOTAL (other not shown)
Sure, let Bush tax cuts expire, but don't think that will fix everything.
Posted by: AndrewDover | November 22, 2009 10:21 AM
Nothing fixes everything, but taxes do fix expenses... and I repeat the post I wrote regarding the NYT's piece on the same horrific future they see coming via the deficits.
Taxes.
Have 30 years of the insanity known as neo-liberal economics actually achieved their goal? Can we not even think of, much less mention the words 'raise taxes' without fearing a lightning bolt smashing us (more) senseless?
Has it become inconceivable that policy makers, looking at an America that would have been unrecognizable just 40 years ago, an America where 50% of all children in America will be fed using food stamps... that they cannot consider balancing a budget by raising taxes?
Where 1% of the nation owns more than the bottom 90%, thereby creating an asset and income inequality not seen for nearly a century, very common in third world countries... and still not consider raising taxes?
The issue raised by the NYT and CNN is not only the analytical red-herring appropriately pointed out by Dean, but is a problem of our own creation as we apparently remain so dopey and dazed by the 'low taxes create prosperity' meme pedaled by the greediest, richest and most shameless among us that we cannot solve the problem by .... gasp.... raising taxes on the wealthiest among us.
Will this solve everything? Heck no, but it will make us all responsible to the degree that we prosper.
Posted by: Sid | November 23, 2009 8:05 PM