The Washington Post is widely known for giving shrill warnings about the deficit danger, but this one is really over the top. It is literally titled: "the coming debt panic." The piece tells readers of the urgency of reining in the debt, telling readers that: "failing to do so will lower the national standard of living." Sorry folks, this is not true. To push its deficit reduction position, the Post is doing what folks in Washington call "dissembling." They have another word for it everywhere else. Standard economic models do show that deficits can slow economic growth by crowding out investment, they do not show that this impact will be large enough to actually lead to declining standards of living, or at least not any time soon. The editorial also has the gall to emphasize the problem by telling readers: "consider: In the space of a single fiscal year, 2009, the debt soared from 41 percent of the gross domestic product to 53 percent." This should have readers have everywhere setting their newspapers and computers on fire. Yes, the debt rose from 41 percent of GDP to 53 percent, but the reason was not profligate spending by Congress or even irresponsible tax cuts. The reason for the surge in the debt was the economic crisis brought about by the collapse of the housing bubble. The Post could not be bothered to write about the housing bubble as the danger was mounting, only giving attention to the likes of Alan Greenspan and Ben Bernanke, who told us everything was fine, or even better, presenting readers with the assessment of David Lereah, the chief economist of the National Realtors Association and the author of the 2006 bestseller, Why the Real Estate Boom Will Not Bust and How You Can Profit From It. Now that the economy has collapsed due to the incompetence of the people whom the Post deems experts, the Post is going back to those exact same experts and telling readers that we have to cut Social Security and Medicare. I'd write more, but it's difficult on a burning computer.
--Dean Baker
