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Earlier this week I expressed some hope that the traditional media would accurately cover the debate over how to best get our economy back on track: robust public investment that pays off long-term, or a short-term focus on balancing the budget that clamps down on investment.
While much of the media has been making a false presumption that new public investment is fiscally impossible, several economic experts have been trying to correct that notion, and Monday's New York Times noted that "the extra spending, a sore point in normal times, has been widely accepted on both sides of the political aisle as necessary to salvage the banking system and avert another Great Depression."
Yet today we see a backslide in the Los Angeles Times, with an article titled, "Obama and McCain in Denial About Deficits, Economists Say."
The article fails to inform on several fronts:
1. The first sentence falsely asserts: "Despite harsh scrutiny from economic analysts, Barack Obama and John McCain remain reluctant to admit what is becoming obvious -- that the nation's economic crisis will take a heavy toll on their ambitious tax and spending plans." But it is not a certainty that the current economy "will take a heavy toll" on their plans. Both could execute their stated plans, even if they add to the deficit in the short-term, in hopes of stimulating the economy. Obama could proceed with additional public investment, tax cuts for working families and tax increases for families earning more than $250,000. McCain could proceed with his corporate tax cuts (although McCain would need deeper spending cuts, as yet unstated, if he is to meet his pledge of a balanced budget in four years.) In fact, the article contradicts itself later on when it says: "a growing number of economists, including some free-market-oriented experts, say the nation faces massive deficits over the next several years no matter who is elected president." In other words, both could choose short-run deficits as a response to the economic crisis, far from the crisis taking a "heavy toll" on their plans. They both have choices. Nothing is preordained. A professionally reported article would explain the pros and cons of those choices so people can make informed decisions.
2. The article repeatedly assumes budget deficits as unequivocally bad, but never actually offers a reason why they would be bad. In fact, as I noted above, many economists support deficit spending in response to economic recessions.
See more stories tagged with: media, budget, investment, financial crisis
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