Media reports on polls indicating public concern over the federal budget deficit did not report the view among prominent economists that the government's response to recession should be spending and not deficit reduction.
Recent reports by The Wall Street Journal, The New York Times, CBS, and NBC on their polls indicating public concern over the federal budget deficit did not report the view among prominent economists that the government's response to recession should be spending and not deficit reduction. Indeed, Nobel Prize winner Paul Krugman, among others, attributes the reversal of the economic recovery under way during the New Deal to pressure on President Franklin D. Roosevelt to balance the budget. Rather than note that many economists dispute the notion that the government's top priority now should be reducing the deficit, these media outlets reported only the public's fear and concern on the subject. And given their failure even to mention that prominent economists do not share the public's view on economic priorities, it follows that they made no mention of the media's role in creating this public perception as well as their role now in reinforcing it through their flawed reporting.
In a February 15 op-ed, economist Mark Zandi dismissed concerns about the increased deficit spending needed to finance the stimulus package, arguing instead that the package was "too small":
There are concerns that the stimulus plan's $789 billion price tag is too large. To pay for it we will have to borrow the money, adding significantly to the government's debt load. But without a stimulus, the depression would undermine tax revenue and fuel more government spending, producing even larger deficits and debt burdens.
It is fortunate that we are still the global economy's triple-A credit; even though this calamity began in the United States, global investors still prefer the safety of U.S. Treasury bonds. We will thus be able to borrow the money at record-low interest rates.
Indeed, my most significant criticism of the current stimulus plan is that it is too small.
Our struggling economy will produce nearly $1 trillion less than it is capable of this year and will underperform again by at least as much in 2010. The $789 billion in spending and tax cuts to be distributed over those two years is not going to fill this expected hole in the economy. I would thus not be surprised if policymakers are forced to consider a second stimulus plan soon.
Nonetheless, when combined with other aggressive policy steps, including efforts to shore up the financial system and stem foreclosures, this fiscal-stimulus plan will go a long way toward relieving the current economic crisis.
Media Matters for America has written extensively about the media's advancement of conservative views on the economy and attacks on progressives through their flawed coverage of the recession and efforts to address it. The reporting of the poll questions offers further examples:
- On June 18, the Journal reported that Obama "faces new concerns among the American public about the budget deficit and government intervention in the economy" and that "[a] solid majority -- 58% -- said that the president and Congress should focus on keeping the budget deficit down, even if takes longer for the economy to recover." The Journal added that the "results come after weeks of Republican hammering of Mr. Obama for spending too much" -- an argument, according to the Journal, that appears "to be resonating with some voters" -- and that "[t]he president and his advisers appear to be aware of the peril they face over the deficit." Yet the Journal did not report that prominent economists view the recession and job loss as a far more immediate problem than the deficit and stress that spending -- not deficit reduction -- in the short run is what is necessary to turn the economy around.
- The previous night, Chuck Todd discussed the NBC/Journal poll results on NBC's Nightly News and said: "[T]he honeymoon's coming to an end for President Obama, but it's not personal, it's professional, as now the public appears to be judging the president on some of his actions. And right now, there's a growing concern about the budget deficit." He later added, "A substantial majority, 58 percent, say the government should focus more on controlling the budget deficit than on boosting the economy." While commenting on what the poll might signify for Obama, at no point did Todd note that many economists disagree with the view by a majority of respondents that the deficit should be a higher priority than "boosting the economy."
- Also on June 17, Harry Smith reported on the CBS Evening News that "there are questions about some of [Obama's] economic ideas, according to the CBS News/New York Times poll out tonight." Smith added, "60 percent said the president has no plan for dealing with the skyrocketing deficit," but did not provide the view of economists that the deficit should not be the chief concern in the short term.
- Similarly, a June 17 Times article reinforced the poll results by saying they present a problem for Obama rather than providing the view of economists that the deficit should not be the chief concern in the short term. The Times cited economists only to report that "the towering federal budget deficit ... is expected to push the national debt to levels that many economists say could threaten the economy's long-term vitality." The Times reported:" As Mr. Obama finishes his fifth month in office and assumes greater ownership of the problems he inherited, Americans are alarmed by the hundreds of billions of dollars that have been doled out to boost the economy. A majority said the government should instead focus on reducing the federal deficit."
Responding to the poll results, Salon.com's Andrew Leonard made a similar point, noting the prevalence of deficit-based attacks made by conservatives. Leonard wrote that attacks by conservatives on Obama over his "big spending" -- rather than the views by prominent economists about the need for spending during a recession -- seem to be "having an effect," as evidenced by the poll numbers:
Keynesians everywhere are wincing. Deficit reduction during an economic contraction, they will argue, runs the risk of deepening the contraction, causing greater human suffering, and prolonging the point at which the economy starts to recover. That's what happened in 1929, and we really don't want to go there again. There's also a good chance that a fiscal austerity regime could, in the long run, even make future deficits bigger -- because an even weaker economy means less tax revenue and greater social welfare spending (if the government continues to do things like pay for unemployment benefits.)
Our best evidence for this, say the Keynesians, comes from both the outset of the Great Depression, and midway through Roosevelt's second term, in 1937, when the president gave in to deficit hawks and attempted to rein in government spending, a move that is widely seen as crippling the recovery that had at long last gotten under way.
To most Americans, however, that's ancient history, and it's not the kind of thing you hear too often on the cable news talk shows. What you do hear, every single day, from every Republican in Congress and every right-wing pundit, is an unceasing reiteration of rabid concern about Obama's big spending. The poll numbers would seem to indicate that GOP talking-points discipline is having an effect. (Although the data is contradictory, as the polling also shows that most Americans blame the Bush administration for the deficit, and not Obama.)
As Media Matters documented, during the debate over the economic stimulus plan, numerous conservative media figures attacked Obama by comparing his spending proposals to those of the New Deal and claiming that the New Deal was ineffective or harmful. But according to several prominent economists, Roosevelt did not go far enough to end the crisis and his attempts to balance the budget hindered recovery.
From the New York Times/CBS poll conducted June 12-16:
Which comes closer to your own view? The federal government should spend money to stimulate the national economy, even if it means increasing the budget deficit, OR The federal government should NOT spend money to stimulate the national economy and should instead focus on reducing the budget deficit.
Stimulate the economy: 41
Reduce budget deficit: 52
So far, do you think the Obama Administration has developed a clear plan for dealing with the current budget deficit, or hasn't it developed one yet?
Has developed clear plan: 30
Has not developed clear plan: 60
From the Wall Street Journal/NBC News poll conducted June 12-15:
Which of the following two statements comes closer to your point of view?
Statement A: The President and the Congress should worry more about boosting the economy even though it may mean larger budget deficits now and in the future.
Statement B: The President and the Congress should worry more about keeping the budget deficit down, even though it may mean it will take longer for the economy to recover.
Statement A/Worry more about boosting the economy: 35
Statement B/Worry more about keeping budget deficit down: 58
Depends (VOL): 2
Not sure: 5