Maybe reporters Brian Faler or Nicholas Johnston at Bloomberg asked Barack Obama some really challenging questions when they had a chance to interview the President at the White House. Maybe they even did some basic fact-checking. If so, there's precious little evidence of either in their June 16 report.
They allowed the president to blame most of the current year's deficit on George W. Bush. They let him speak of "robust" growth when the best guesstimates they quoted for the second half of this calendar year and all of next year are anemic -- at least as the press benchmarked growth during the Bush 43 years.
The Bloomberg pair also ignored the alarming deterioration in federal receipts from economic activity that has continued into June, one of the four biggest collections months of the year.
Here are key paragraphs from Faler and Johnston's failed filing (bolds are mine):
Obama Says ‘Robust’ Growth Will Prevent Tax Increases (Update1)
President Barack Obama said he is "confident" that he won't have to raise taxes on most Americans to close the budget deficit as long as the economy picks up steam.
"One of the biggest variables in this whole thing is economic growth," the president said in an interview with Bloomberg News at the White House. "If we are growing at a robust rate, then we can pay for the government that we need without having to raise taxes."
Obama has repeatedly said he would keep his campaign pledge to cut taxes for 95 percent of working Americans while rolling back tax breaks for households making more than $250,000 a year.
"I’m confident that we don’t have to raise taxes on ordinary working families," he said.
The U.S. economy shrank at a 5.7 percent annual pace in the first quarter, reflecting declines in housing, inventories and business investment. Growth is expected to turn positive in the second half of the year, accelerating 0.5 percent from July through September and 1.9 percent in the final three months of this year, according to the median estimate in a Bloomberg survey of 62 economists. The median forecast for growth next year is 1.8 percent, according to the survey.
Obama warned that if economic growth remains "anemic" and Congress fails to adopt his plans to hold down the cost of health care, work on alternative energy sources and improve the U.S. education system, "then we’re going to continue to have problems."
He also repeated his promise to cut the budget deficit, forecast to hit $1.8 trillion this year, in half by the end of his first term. The budget he submitted to Congress in February anticipates that the government will still run what would be, by historic standards, large deficits for the foreseeable future.
..... "If my proposals are adopted, then not only are we cutting the deficit in half compared to where it would be if we didn’t do anything, but we’re also going to be able to raise revenue on people making over $250,000 a year in a modest way," he said. "That helps close the deficit."
..... Obama said a large part of the current budget deficit was inherited from the administration of former President George W. Bush, his predecessor, and that extra spending was needed to address the worst global financial crisis since World War II.
First, here are direct responses to the bolded items:
- If the President is looking for "robust" growth as the press defined it from 2001-2008, he'll have to go to calendar year 2011 to find it, based on the economists Bloomberg surveyed. You can take it to the bank that no establishment media reporter would have let Bush or any of his economic advisers get away with characterizing 1.8% annualized growth as "robust" (nor should they have), and no reporter would have used the word "accelerating" to describe 0.5% quarterly growth (nor should they have; not annualized, it's only +0.0125%). Yet there's no hint of a challenge from the duo, and Bloomberg's editors -- if they exist -- let their adjective describing pathetic growth stand.
- With tobacco tax increases of up to 2173% that went into effect in April, Obama has already broken his promise to cut taxes for 95% of "working Americans." The Associated Press's Calvin Woodward, who is one of the few reporters at the wire service successfully avoiding the Obama Kool-Aid machine, made that point when the increases took effect ("PROMISES, PROMISES: Obama tax pledge up in smoke"). Yet -- no challenge.
- The "large deficits" by "historic standards" were called "record deficits" during the Bush 43 years, when they were much lower, and were records by much smaller amounts. Yet -- there's the watered down language.
- The "inherited" line would have some credibility if anyone could cite one meaningful instance where Obama opposed additional spending. The only one I can think of is that he may have voted against funding the war in Iraq. But he has long since signed on to continued spending there, proving that any anti-funding votes he may have made while he was an Illinois senator were postures without significance. More currently relevant, Obama actively supported the blackmail-driven bailout known as TARP, and the black-hole bailouts of General Motors (at least $70 billion and couting by itself) and Chrysler. Yet -- no challenge.
Then there's the matter of the possible need for tax increases, which depends more than a bit on how well tax collections are going.
Collections continue to be in the tank, based on comparing the Monthly Treasury Statement of June 18, 2009, to June 19, 2008 (both Thursdays):
As was the case in April and May, June receipts from economic activity are down from the previous year by over 25%, and seem to be a cinch to trail June 2008 by over $60 billion at month-end. If Treasury is really doing its TARP accounting on a "Net Present Value" basis (discussed in detail at link), the much-heralded TARP loan repayments by major banks amounting to $68 billion, though they will reduce the national debt, will not be treated as receipts.
It will take more than the time-delayed, historically ineffective, mislabeled "stimulus" package that nobody read to restore robust growth such as the annualized 4.8% the Bush economy achieved in the second and third quarters of 2007. It will take something different that is the opposite of tax increases.
Cross-posted at BizzyBlog.com.
