It seems that Congress has become obsessed with our budget deficit. We all can agree that in the long-term, US debt is indeed a very serious issue. What we can’t all agree on is what to do to reduce it, and more important, WHEN to take steps to reduce the deficit. All the economists I trust are insistent that reducing the deficit during a Recession will only prolong it and may turn it into a Depression. Robert Reich in particular has proven to me that there is no way to simultaneously reduce the deficit AND create jobs. Two things reduce deficits– income (through taxes), and less spending (cut programs).
What creates income? Jobs and exports. What creates jobs and doesn’t increase the deficit? Nothing. Geithner and Bernanke BOTH said deficits are less urgent than job creation.
So I am wondering how this obsession with immediate deficit reduction became so omnipresent. It is obviously a Right-wing talking point and issue, and I assumed that the corporate press had a hand in ginning up this issue. Deficits are more important than jobs if you are a corporation. Businesses like the recession—They can hire fewer workers for less salary and work them longer, making bigger and bigger profits. Businesses don’t like deficits because their dollars are deflated = lower profits. So the corporate media keeps pressing deficit reduction. Or does it?
Just for the heck of it, I took a completely unscientific study today and looked at the major news outlets— ones most people see and read. I omitted radio, internet and blog news sites, and all cable news except for Fox. The following are stories that are about the deficit or related to it from the last few months only:
Tea Party to Washington: ‘Pain Should Be Shared by Everyone’
It seems a chicken/egg situation: The news outlets report on Congress, and Congress (as well as the White House) talks a lot about the deficit. And Congress reacts to news stories, so I can’t tell how the deficits got more play than jobs creation. But it did.
All in all, I have to say I was surprised at the relatively balanced discussion of deficits in the newspapers. I noticed that the Midwestern papers appeared to have more concern about the federal deficit than the Coasts, but I didn’t really check all the Plains papers. I was going more for the papers in highly populated areas. That could make a significant difference.
One thing that I found worrisome was the reliance on AP in most of the major outlets; almost all used wire stories. I think that could be a problem.
What I really learned from this experience: I watch too much cable!