In the real world this would be difficult, but not on NPR. Morning Edition had a lengthy segment on the deficit with David Walker, the president of the Peter G. Peterson Foundation, an organization founded by Peter G. Peterson, the billionaire Wall Street investment banker and Commerce Department secretary in the Nixon Administration. Walker was allowed to give his account without any alternative perspectives. Walker explained the shift from the large surpluses at the end of the Clinton era to the deficits the country is now seeing without reference to the wars in Iraq and Afghanistan and Iraq that have already added more than $1 trillion to the debt, the housing crash which has increased the debt by more than $1 trillion in 2009 alone, and the stock market crash which through the country into recession in 2001 and cost the country more than $500 billion in capital gains tax revenue. While these developments explain the vast majority of the deterioration in the budget situation in the last decade, they were not mentioned once by either Walker or the reporter conducting the interview. Instead, Walker blamed an irresponsible Congress that allowed the money to burn a hole in its pocket. Even if it does not fit reality, this story fits with Mr. Walker's political agenda of creating a special commission that will issue a proposal to cut the deficit that is fast-tracked so that it does not follow normal congressional procedures. It is especially worth noting the failure to mention the impact of both the stock and housing bubbles. There were economists who warned of these bubbles and the damage that would be caused by their collapse. NPR almost never allowed their views to be presented to their listeners. Even now that the collapse of the housing bubble has given the country the worse downturn since the Great Depression, NPR is still relying almost exclusively on economists who could not see these bubbles and continues to ignore those who understood the economy. It is also worth noting Walker's repeated references to "foreign creditors." This may appeal to xenophobic sentiments, but it has nothing to do with the issue at hand. The government's financial situation would not be qualitatively different if all our creditors were domestic. (In this country, investors are free to put their money in other countries. If domestic investors lose confidence in the U.S. government, presumably they would put their money elsewhere, just like foreign creditors.) The foreign debt is determined by the trade deficit, which is in turn a function of the over-valued dollar, neither of which were mentioned in this segment.
--Dean Baker
