Pretty nice little piece that a journalist friend of mine linked to in FB. Basically, 7 common mistakes journalists make in covering the debt ceiling. I think two of these are of particular importance as they very much run counter to the narrative the GOP has been pushing:
Mistake #1: The debt ceiling limits the spending of the U.S. Government.
House Republicans who are resisting a rise in the debt ceiling often make this argument, said NPR correspondent Robert Smith, who’s covered the debt issue for Planet Money. He explained that the government only spends money when it is approved by Congress, which has already approved the budget for this year and promised money to Medicaid and the Department of Defense. Issuing the debt is just the final step that enables us to pay our bills.
“The way I put it is that Congress has already ordered the pizza. They approved the pepperoni. They called up and had someone deliver it,” Smith said via email. “Now the pizza guy is knocking at the door, and asking to get paid. If you don’t raise the debt ceiling, it’s like saying we didn’t want that pizza in the first place. Maybe he’ll go away if we don’t answer.”
If the debt ceiling isn’t raised, much of the government will have to shut down. “That’s a brutal way of limiting spending,” Smith said. “But even then we’ll still owe the money we already budgeted. We just won’t be paying it until the crisis is over.”
Love that analogy– I’m going to have to start using it. Also:
Mistake #3: The U.S. government is like a family that needs to balance the budget.
People sometimes compare the U.S. government to a family balancing its budget, or say our debt is like a credit card that has a limit on it. These are handy metaphors, Smith said, but they can be misleading.
Unlike a family, which cuts its budget because it makes a limited amount of money, the government can raise its income through taxes whenever it wants. If a family could get a 10 percent raise at will, then it would be less likely to cut its budget.
“Unlike a family, the government can print its own money to make its debts seems smaller,” Smith said. “Unlike a family, the government owes much of the debt to itself.”
A big part of the U.S. debt, he explained, is money that one branch of government owes to the other.
“Like Mom lending Dad some cash. You don’t count that in a family. But we do count it in the debt ceiling debate,” Smith said. “And another biggie. Credit card companies eventually want their money back. But foreign governments own Treasury bonds as a way to store money. They don’t want the money back (yet). They just keep rolling over the debt.”
Okay, one more mistake, but this one could go for pretty much every issue, not just the debt ceiling:
Mistake #7: Giving equal weight to politicians.
Journalists tend to turn to politicians as sources rather than to financial experts. And they try to equally represent both sides of the political spectrum. Allan Sloan, a senior editor at large at Fortune, said that works for some stories, but not this one.
“This is not the kind of story where you can give equal weight to what everyone says,” he explained by phone. “There’s a lot of screaming by people who are politically informed but not financially informed, and they’re being quoted along someone like Ben Bernanke.”
Amen to that. Dare I say that more of the screaming people who don’t know what they are talking about are Congressional Republicans and their apologists.