Ezra Klein is cheerleading for the Administration

December 21, 2012 at 6:05 pm in News by Dustin Siggins 26 Comments

ezra

With the New Year and the “fiscal cliff” approaching, partisan lines are being drawn around the various deals being offered by President Obama and Speaker Boehner. Over at the Washington Post Wonk Blog, the lines are no less partisan, and this has been especially true this week as the President’s policies are given full-throated support.

Earlier this week, Tea Party Patriots highlighted bias by Wonk Blog reporter Suzy Khimm. Now, however, the founder of the Wonk Blog, Ezra Klein, has taken his partisanship to Bloomberg.

Consider three points from Klein’s Bloomberg column on Thursday:

1. According to Klein, savings on winding down the conflicts in Iraq and Afghanistan “is expected to cut about $1 trillion over 10 years.” This is a bipartisan accounting trick based upon Congressional Budget Office (CBO) expectations of future spending. It has been done by Rep. Paul Ryan (R-WI), Senate Majority Leader Reid (D-NV) and President Obama, and now by Klein.

 The fact is that nobody expects the same levels of spending in Iraq and Afghanistan a decade from now, and to pretend it will happen is simply a way for partisans to pretend they are more fiscally responsible than they are. To quote George Will from March 2009  (emphasis added):

Growth supposedly will cut the deficit in half — growth and the $1.6 trillion “saved” by first assuming, and then “canceling,” a 10-year continuation of the surge in Iraq. Why, one wonders, not “save” $5 trillion by proposing to spend that amount to cover the moon with yogurt and then canceling the proposal?

2. Next, Klein claims the President’s offered deal would “flatten out” the debt-to-GDP ratio from 2020 onward:

According to Goldwein’s calculations, the deal proposed by the White House earlier this week would produce declines in the debt-to-GDP ratio until about 2020, after which the trend flattens out. Greenstein agreed. “The administration’s package comes close, but probably doesn’t get you all the way there,” he said.

There are multiple flaws with this one point alone. First, which deal? The President has offered several deals to Speaker Boehner. Second, the CBO’s most recent budget report shows on Page 6 the public debt-to-GDP ratio of the federal government going down only if trillions in tax increases and spending reductions go into effect. Otherwise, it continues to climb from its current level.

As Patriots know, Congress and multiple Presidents have continually patched or delayed various policies in order to make “temporary” tax policies semi-permanent and to avoid required cuts to federal spending. Given how the Budget Control Act’s provisions have lasted less than 18 months without renegotiating (hence the debate over the spending side of the “fiscal cliff” in the first place), expecting this President and Congress to break this pattern of behavior is absurd, yet that is essentially what Klein’s source believes.

3. Perhaps most dishonestly, Klein channels Yale economist Robert Shiller to downplay the significance of debt:

“We tend to focus on debt because it’s moralizing,” he told me over the phone. “It has an emotional impact on us. Religions talk about debt,” he said. “This moral dimension gives it excessive importance.”

Even the focus on the annual debt-to-GDP ratio is skewed, Shiller said. “There is nothing special about using a year as that unit,” he has written. “A year is the time that it takes for the earth to orbit the sun, which, except for seasonal industries like agriculture, has no particular economic significance.”

He said that if you measured Greece’s debt against its GDP over 10 years — which, he said, would be more appropriate since the government doesn’t have to pay off its debt in a single year — Greece’s debt burden would be only 15 percent of GDP.

This is dishonest for three reasons. First, the authors of a 2010 paper in the American Economic Review pointed out how high debt-to-GDP ratios, particularly those over 90% (which America has long passed), have drastic impacts on economic growth. To dismiss the effect of debt on a country ignores how Greece has required multiple bailouts.

Second, Shiller is basically saying that GDP equals government income. In other words, he is saying the entirety of a nation’s economy is equal to the government’s income. Obviously, this is false – taxes are a government’s income. While taxes equal to GDP could happen, it would only take place for a year, since after that most citizens would starve, go homeless, or leave the country.

Third, religions do talk about debt. But so do businesses, atheist-run households, and – yes – governments at all levels.

Klein’s column is not all bad. There are two small pieces of good related to it. First, it admits that the President’s offer of $2 trillion in deficit reduction over a decade – split evenly between tax increases and spending cuts – “is surely small-ball.” Ironically, this is in almost direct contrast to a Klein post at the Wonk Blog on Tuesday that claimed the President presented an offer to the Speaker on Monday “that included genuine concessions.”

The second piece of good news is that Klein’s column came out the same day as Senator Rand Paul’s (R-KY) on the fiscal cliff, meaning readers can easily transition from Klein’s falsehoods to the tough truths coming from the Senator. In Investor’s Business Daily, Senator Paul accurately points out that spending is the problem, not revenue, and that “with a $16 trillion national debt and well over $1 trillion annually in deficits, we barreled over the edge of fiscal insolvency long before this month.”

As the “fiscal cliff” gets closer, dishonest partisanship like Klein’s is only going to get worse. This blog will attempt to refute some of it. Please feel free to request fact-checking on other articles, op-eds, blog posts, etc. in the comments.

 

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