Now That's Problematic

When we hear pledges to reduce the projected deficits over the next 12 years by $2tn or $4tn, how many people have any clue how large these reductions – on which the current debt ceiling talks between President Obama and House speaker John Boehner turn – are, relative to projected spending or projected GDP over this period? (The $4tn figure is 8.7% of projected spending and 3.7% of GDP.)

How about that $14.3tn figure for the debt ceiling? That's a really big number, really scary. So is just about every number connected with the United States budget. We are a huge country with a huge economy. Competent reporters would focus on this being about 90% of US GDP.

Is that big? Well, the debt to GDP ratio was over 110% after the second world war. The United Kingdom had debt to GDP ratios of more than 100% for much of the 19th century, as it was establishing itself as the world's pre-eminent industrial power. Japan has a debt to GDP ratio of more than 220% of GDP and can still borrow in financial markets long-term at interest rates of less than 1.5%.

So, what's the problem? The politicians who want to cut social security and Medicare obviously want the public to believe that there is a huge problem and – due to the incompetence of the media – they have managed to instill fear throughout the nation about this massive non-problem.
~ from Manufacturing Deficit Fear: On Holding Economic Journalists to Account by Dean Baker ~

When we were young, what were we taught about the people who go off to Washington to serve as our elected leaders? Why, they were going to promote democracy, of course!

It is only as we grew older and wiser that we came to understand that this teaching is more of a ruse than anything else. People go to Washington DC to participate in a grand side-show. They play roles that are responsible for distracting the populace. They pound gavels and wave their arms. They give speeches and press conferences. They pontificate.

They draw in the attention of the people to focus on the characters they play -- like a soap opera on TV -- so that the public becomes distracted from what's really going on in the smoke-filled back rooms. They weave magnificent tales filled with suspense and drama that have nothing to do with the real-life plot line.