Jeff Bezos’ Newspaper Runs Joke Front Page Story on Deficit - Dean Baker/FDL [View all]

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Jeff Bezos’ Newspaper Runs Joke Front Page Story on Deficit
By: Dean Baker - FDL
Sunday August 25, 2013 5:44 am

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Those who hoped that Jeff Bezos takeover of the Washington Post would lead to a quick improvement in the quality of its budget reporting will be seriously disappointed by the paper’s lead story today. The story bemoaned the fact that, “after six budget showdowns, big government is mostly unchanged <the article's headline>.”

The article uses four metrics to measure the size of government, none of which would inform readers of anything. Its lead metric is spending in nominal dollars, which it tells us will be $3.455 trillion in fiscal 2013. It tells us that this is down by only a small amount from a “whopping $3.457 trillion” spent in 2010.

Incredibly, the article does not even adjust this spending amount for inflation. (The piece does briefly note later that this is a 5 percent decline adjusted for inflation.) Of course a serious analysis would have expressed spending as a share of GDP, which shows that spending dropped from 24.1 percent of GDP in 2010 to 21.5 percent of GDP in 2013. This decline in spending of 2.6 percentage points of GDP would be the equivalent of roughly $420 billion in today’s economy.

Assuming a multipler of 1.5, this reduction in spending has cost the economy more than $600 billion in annual output since there is no plausible story by which cuts in government spending lead to addition private sector demand in the current economic situation. (To be fair, there is a lot of vigorous handwaving on this topic by proponents of spending cuts.) That would translate into more than 5 million fewer jobs.

The piece goes on to tell us that Bezos’ paper does not like government spending in general and in particular dislikes Social Security and Medicare. In terms of government spending the piece tells readers:

“But even now, the government still spends a vast amount of money.

“This year’s projected spending will be more than in any year of the George W. Bush administration. And more than 30 percent higher (accounting for inflation) than the last year of President Clinton’s term.”

Those who are interested in serious historical analysis...

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More: http://my.firedoglake.com/deanbaker/2013/08/25/jeff-bezos-newspaper-runs-joke-front-page-story-on-deficit/