The Democratic Party and their media enablers, such as the New York Times, slaughter the Republicans when it comes to economic reporting. The public discussion of social security taxes, unemployment benefits, and stimulus takes place in the language of Keynesian multipliers and stimulus counterfactuals. He who controls the language of debate has already won, no matter how inappropriate or ridiculous. (I cite as an example of the latter the discussion of unemployment benefits as a form of stimulus that will restore the economy to health).
The Democrats and their media enablers use a tried-and-true template to dominate the debate. I use the New York Times article, “Analysts Say Economic Recovery Might Suffer if Tax Break Is Allowed to Expire,” to illustrate how it works.
The article’s objective is to convince readers that all right-thinking people know that the economy will go down the toilet if there is no agreement on extending the payroll tax cut and unemployment benefits. They claim that “economists” or “analysts” agree on this. They then interview four economists/economic organizations that support this conclusion and they cite one senior White House official who warns of dire consequences. They then dismiss one skeptic, who makes a technical point the average reader will not understand.
Voila! “Economists” agree with the Democrat position.
There is no reason why two cannot tango.
I have taken the liberty to rewrite the Times article to prove the opposite case. I use four respected economists and one respected media outlet and cite only one supporter of the administration case.
Here is my version, new headline and all. I preserve as much of the original Times language as possible:
Economists Warn That Risky Tax Cut Threatens Social Security, Does Not Help Recovery
Economists warn that the extension of a temporary payroll tax cut threatens Social Security and saps strength from a fragile recovery. Republicans, intimidated by populist attacks from the Democrat left, agreed on Friday to the extension by voice vote in Congress.
The tax cut extension means that the social security trust fund will receive $159 billion less in 2011, causing it to run a deficit for a second straight year. The Social Security trust fund deficit will be paid from the general fund of the Treasury. "This pretty much ends the claim that Social Security is self-financing or that it doesn't contribute to the budget deficit," says Andrew Biggs, a resident scholar at the non-partisan American Enterprise Institute and a former deputy commissioner of the Social Security Administration.
Although the precise impact of the payroll tax cut this year is impossible to know, analysts generally predict that it will not increase consumer spending because of its temporary nature, its negative impact on the long-term deficit, and the uncertainty it creates.
Stanford economist John Taylor reports that “to think that a temporary cut would stimulate the recovery and get employment growing defies common sense. There is no hard evidence that the temporary payroll tax cut of this year stimulated the economy, and another one for the first two months of next year will obviously do even less.”
University of Michigan economist Joel Slemrod predicts that most households will save the payroll tax cut anyway: “About half say they’re going to pay off debt, about a third say they’re going to save it, and the rest say they will spend it.”
Harvard economist Robert Barro uses the term “voodoo multipliers” to describe the outmoded belief that increases in government spending or temporary reductions in tax payments stimulate the economy.
Yet some economists believe that extension of the payroll tax cut will stimulate the economy. Democrat-leaning and bailout recipient Goldman Sachs estimates that an expiration of the tax cut could knock two-thirds of a percentage point off growth in early 2012.
The non partisan USA Today has seized on independent economists’ views to oppose the extension of the payroll tax cut. Its editorial argues that temporary tax cuts have a way of becoming permanent. Congress will be afraid to restore the payroll tax back to its previous level. Once that happens, social security will become another unfunded entitlement that we cannot afford.
If it is as easy as this, why don’t the Republicans put up a better fight?
First, most journalists have little or no training in economics. If they do, they most likely got the Keynesian-consensus version.
Second, Non-Keynesian economists trend to be media shy. They would rather stick to their work, and they know from past experience they’ll likely be misquoted anyway.
Third, I fear that few Republican politicians are well enough versed in Non-Keynesian economics to make a convincing case.
Fourth, the two most-respected international newspapers that might subscribe to my version – the Wall Street Journal and the Investors Business Daily – are in the business of giving factual information for readers who might wager their money on what they read. As such, they cannot afford to engage in political discussion, except on their editorial pages. (Of course, Forbes also provides a forum for such ideas as is evident from this piece).
Finding a way to get its economic message across should be a top priority of the Republican Party.
