July 14, 2009

Crutsinger’s Crud, Part 1: AP’s Budget Deficit Report Riddled With Errors and Omissions

APlogoUpsideDownIn a report meant to cover Uncle Sam’s release of June’s Monthly Treasury Statement, Associated Press reporter Martin Crutsinger went well beyond the wire service’s normally lazy, slanted reporting in this area.

In his report’s apparent final incarnation early Tuesday morning, the AP writer:

  • Told us the amount of June’s deficit ($94.3 billion), but didn’t disclose the figures for June’s receipts ($215.4 billion) or “outlays” ($309.7 billion), or how they compared to June of last year. In doing so, he “succeeded” in concealing the accelerating decline in tax collections.
  • Didn’t tell us that the past month’s deficit is by far the worst June ever.
  • “Forgot,” as he did in May, to tell readers that the deficit would be hundreds of billions of dollars higher if it weren’t for an “accounting change” retroactively put into place by Treasury in April that changed the definition of “outlays.”
  • Cited the Iraq and Afghanistan wars as contributors to the deficit situation, while not identifying several other expenditure categories that have been worse offenders by far.
  • Found an economist, without dissent, to support the claim that what the Obama administration has done had to be done.

And that doesn’t even count Crutsinger’s Krugmanesque rewrites of the history of the 1930s Depression era and 1990s Japan, or the apparatchik-like tone present in a few of his paragraphs.

Here is relevant verbiage from Crutsinger’s roughly 900-word report (also saved here at host for future reference; letters in parens are mine; some letters are used twice to tie in related items):

The federal deficit has topped $1 trillion for the first time ever and could grow to nearly $2 trillion by this fall, intensifying fears about higher interest rates, inflation and the strength of the dollar.

The deficit has been widened by the huge sum the government has spent to ease the recession, combined with a sharp decline in tax revenues. The cost of wars in Iraq and Afghanistan also is a major factor. (D)

….. The Treasury Department said Monday that the deficit in June totaled $94.3 billion (A), pushing the total since the budget year started in October to $1.09 trillion. The administration forecasts that the deficit for the entire year will hit $1.84 trillion in October.

….. President Barack Obama and Treasury Secretary Timothy Geithner have said the U.S. is committed to bringing down the deficits once the economy and financial sector recover. The Obama administration has set a goal of cutting the deficit in half by the end of his first term in office.

….. Many private economists say the administration had no choice but to take aggressive action (F) during the financial crisis.

“We have a deep recession hammering tax revenues and forcing the government to provide a lot of help to the economy,” said Mark Zandi, chief economist at Moody’s Economy.com. “But without this help, the downturn would be even more severe.” (F)

….. Republicans in Congress are seizing on the deficit – and the persistence of the recession – to attack Democrats. (E)

….. The deficit of $1.09 trillion so far this year (C) compares to an imbalance of $285.85 billion through the same period a year ago. The deficit for the 2008 budget year, which ended Sept. 30, was $454.8 billion, the current record in dollar terms. (C)

Revenues so far this year total $1.59 trillion, down 17.9 percent from a year ago, reflecting higher unemployment, which cuts into payroll taxes and corporate tax receipts. (B)

Readers are probably starting to see how difficult it is to criticize an AP report like this. Crud like what Crutsinger is throwing around literally pervades the report, including many non-excerpted paragraphs. It almost takes a dissertation to rebut it. Even then, there are still a few scraps of crud left on the table due to lack of space.

I’ll take the bolded items in the excerpt in alphabetical order.

(A) – Yes, the June deficit was $94.3 billion,, and Crutsinger did communicate a clear sense of alarm. But he avoided disclosing any other monthly figures for June 2009 and 2008 that could have given readers a fuller context:


Perhaps Crutsinger went no further than revealing the June deficit because the stark difference between June 2009 and the previous June is downright frightening. June 2009 clearly shows the worst June deficit ever. It’s also the first June deficit in well over a dozen years (traditionally, June is a month for heavy collections of individual and corporate estimated payments). Every June result available in HTML format online, going back to 1997 (2008 and 2007; 2006 and 2005; 2004 and 2003; 2002 and 2001; 2000 and 1999; 1998 and 1997) shows a substantial reported surplus. A number of Junes prior to that going back to 1981 (go to the Monthly Treasury Statement home page for the PDF and Excel links) show nominal deficits, the largest being June 1991′s $11.1 billion.

(B) – By only telling us year-to-date “revenues” (on what planet? — What Uncle Sam takes in is “receipts” or “collections”; businesses earn “revenues”), Crutsinger masked how much the deterioration in collections has accelerated in recent months. Receipts for the year may be down “only” 17.9% (and that’s if you treat last year’s stimulus payments as negative receipts, which is in my opinion incorrect); but in the past three months, even as the government mis-defines receipts, the shortfall has been even worse (figures that follow are in billions):

- April, May, and June 2008 (billions) — $404 + $124 + $260 = $788
- April, May, and June 2009 (billions) — $267 + $117 + $215 = $599

That’s an astonishing drop of over 25% ($199 divided by $788), during the government’s most important collections quarter (because it contains two months where estimated payments are due, as well as the April 15 filing and final-payment deadline). Go here to see how the situation is really even worse if you more correctly look at receipts from economic activity and ignore 2008′s stimulus payments.

(C) - This one is so pathetic it’s comical. Crutsinger pretending that last year’s deficit is still “the current record” is like telling everyone that professional baseball player Mark McGwire held “the current record” for home runs in a season of 70 (set in 1998) until the end of the 2001 season, not until October 5, 2001, when Barry Bonds hit his 71st round-tripper. Crutsinger is only right if the government …. (excuse me while I roll on the floor laughing …. I can barely get up …. phew) …. runs a $632 billion surplus (the current deficit of $1.086 trillion minus last year’s deficit of $454.8 billion) during the remaining three months of the year. Yeah, it could happen …. Martin, you’re killin’ me.

Beyond that, Crutsinger “forgot” to tell readers that the deficit would be roughly a couple of hundred billion dollars worse if it weren’t for the fact that the Treasury Department decided retroactively in April to account for its “investments” and “loans” to financial institutions, auto companies, parts suppliers and others on a “Net Present Value” basis instead of as immediate outlays (this is why I frequently put “outlays” in quotes). Without that change, the deficit would have crossed the $1 billion threshold one or two months earlier. The government’s justification for that treatment in what is supposed to be a cash-flow report without also reporting on a true cash-flow basis elsewhere is very thin.

Additionally, Treasury should have written off some of its disbursements to Chrysler and General Motors by now. From all appearances, it hasn’t. If Treasury did this, under its convoluted “Net Present Value” treatment, it would have to report write-offs as part of “outlays.” A detailed explanation of “Net Present Value” treatment is here. As I noted a month ago (at NewsBusters; at BizzyBlog), in his report on May’s deficit, Crutsinger also failed  to comment on the 2009 accounting change.

(D) – Comedian Crutsinger’s runner-up one-liner is the claim that the Iraq and Afghanistan wars are big deficit contributors. This doesn’t pass the stench test, let alone the smell test. Here are the details (see Table 3 at the Monthly Treasury Statement):

  • Total defense spending through the first nine months of this year is $473 billion, up $33 billion, or 7%, from last year.
  • The following departments have bigger year-over-year increases AND higher percentage increases than those seen in Defense — HHS ($68 billion, 13%), Labor ($51 billion, 124% [not a typo]), and the Social Security Administration ($53 billion, 11%).
  • The following other departments have increases of $10 billion or more that are up by double digits over last year — Agriculture ($17 billion, 24%), HUD ($12 billion, 32%), and Other Independent Agencies ($29 billion, 240% [not a typo]).

Crutsinger’s single-out of the wars as “a major factor,” and his accompanying failure to identify other more obvious problem areas other than in the vaguest of terms, is really weak, and would appear to betray an anti-military bias.

(E) – This is the apparently mandatory “mean, bullying Republicans go after helpless, well-meaning, angelic Democrats” line the establishment media seems always to employ. When Democrats attack, even personally and viciously, they are “criticizing,” or “objecting.” When Republicans and conservatives raise their voices, it’s virtually always reported as an “attack.” It got really old a really long time ago.

(F) – This is an Obama-like,  straw-man, “it’s better than nothing” argument Crutsinger apparently sought out from an “expert.” Note how the AP reporter did not report a contrary point of view. I guess we’re supposed to think there isn’t one — unless it’s coming from a mean, bullying Republican.

The one major item I haven’t addressed is Crutsinger’s invocation of the “failures to do more,” i.e., embark on ever more reckless government spending, under FDR in the US in the 1930s and in Japan during the 1990s, as reasons why those two economic difficulties persisted for so long. That’s been busted by so many people in so many ways from so many angles that after initially looking to go after it, I decided it would be a waste of time.

Cross-posted at NewsBusters.org.

Lucid Links (071409, Morning)

Filed under: Lucid Links — Tom @ 11:08 am

WSJ071409HouseDemsVsCurrentTaxNoteworthy Net-Worthies:


The Wall Street Journal’s editorial howl about the House’s plans to radically increase taxes is fine to a point, but it really doesn’t go far enough.

Their quickie chart is on the right.

It cannot be emphasized enough (and it’s hardly emphasized at all) that, for example, a rate increase from 35% to 46%, as would occur if the House Democrats get their way, would be a 31.4% tax increase in marginal taxes paid, NOT 11%. Out of each additional $100 in taxable income above $280,000, the victims would have to pay $46 instead of $35. That’s 31% ($11 divided by $35) more dollars paid.

Another thing that can’t be emphasized enough (and it’s almost never brought up) is that the effect on what the “the (not really very) rich” can take home is way above the 11% tax-rate increase. If federal income tax was the only tax in existence (dream on), a person whose marginal rate has increased from 35% to 46% would be taking home $54 out of every additional $100 in taxable income instead of $65. That’s a 17% decrease ($11 divided by $65).

More elaboration, and more dramatic numbers, are on the way in the form of a Pajamas Media column in the works.


What is remarkable about tax proposals like the one just noted is how relatively few people are expected to fund government programs, while everyone else gets a virtually free ride. It’s as if:

  • “The (not really very) rich” have no other purpose in life but to do that.
  • They won’t resent it even a little bit.
  • They won’t react adversely in any way, and will cheerfully cough up the expected boodle.

(begin sarcasm)

I guess their assumption that people don’t change their behavior is right, because as shown yesterday, federal tax collections from economic activity in the second quarter of this year came in almost 31% below the first quarter of last year, even though the economy shrunk about 4% in the previous four quarters. That proves that people don’t react negatively to adverse real or promised government actions.


The economy will have shrunk 4% or less in the past year if 2nd quarter GDP growth comes in at an annualized -3.5% or better. Near the end of this Bloomberg report, economists surveyed by the news service in June, before the latest employment report, predicted an annualized -2.0%.

My gut is telling me that very tepid growth will occur in the the third quarter IF (haha) Congress doesn’t ruin things further. If such a mini-recovery occurs, the American people will deserve all of the credit, because no discernible action by the Obama administration will have caused it.

That said, my guess (and I should emphasize that it’s a guess, because it’s almost impossible to factor in how deeply pervasive the negative psychology is among those who have the biggest effect on the economy), is that the second quarter will come in a bit worse than Bloomberg’s economists believed in June.


You don’t say (HT Instapundit) — “President Barack Obama’s economic forecasts for long-term growth are too optimistic, many economists warn, a miscalculation that would mean budget deficits will be much higher than the administration is now acknowledging.”

Keep in mind that if receipts are down 31%, as noted earlier, it would take a 45% increase (100 divided by 69) to get back to even-steven. The Bush tax cuts increased federal receipts by 44% — and that took 4-1/2 years. That’s even before considering the out-of-control federal spending situation.

Obama’s out-year predictions are for 4% growth. While I’ll admit that it’s more likely — but only because it will be coming off of a shrunken base thanks to the POR (Pelosi-Obama-Reid) “Repression” — the fact remains that annual growth has only hit 4% or above eight times in the past 30 years (1983, 1984, 1985, 1988, 1994, 1997, 1998, and 1999). All of those performances were pre-Sarbanes/Oxley, and all but 1994 were the result of meaningful tax cuts (Reagan’s in the 1980s and the capital gains cut of 1997).

Positivity: Vatican investigator finds ‘compelling case’ for miracle in Wichita

Filed under: Positivity — Tom @ 5:57 am

FrKapaunAndKear0609From Wichita, Kansas:

July 3, 2009 / 12:00 pm

Considering the beatification of the Servant of God Fr. Emil Kapaun (pictured at right), a Vatican investigation has found enough evidence of a miracle in the unexplained recovery of a young man who broke his skull in a near-fatal athletic accident. The man’s mother and her family had prayed for the intercession of the heroic U.S. Army chaplain.

Andrea Ambrosi, a lawyer and investigator for the Vatican, on Friday visited family members and the doctors of two Wichita-area families who believe the survival of their children during near-lethal medical crises should qualify as miracles.

One meeting involved Chase Kear (pictured at left), a 20-year-old athlete from Colwich severely injured in an October pole-vaulting accident, the Wichita Eagle reports.

Fr. John Hotze, judicial vicar for the Diocese of Wichita and also episcopal delegate for Fr. Kapaun’s cause, was not allowed to say who or what families are being alleged for miracles, but he did report there was another “alleged miracle” in the Wichita area which Ambrosi examined in his time there.

Ambrosi met with the doctors involved and studied medical reports and X-rays.

“Afterward, the Vatican investigator said that in years of investigating miracles, he had never seen doctors who made such a compelling case for miracles occurring,” Fr. Hotze said.

Chase Kear’s pole-vaulting accident fractured his skull from ear to ear and caused some bleeding on his brain. Doctors told his parents Paul and Paula Kear that they “didn’t have a lot of hope” for their son, stating he would likely die either in surgery to remove the damaged piece of his skull or from a post-surgery infection.

Family and friends joined in petitions to Fr. Kapaun. Chase survived the surgery and walked out of the hospital only a few weeks out of the accident. Doctors were unable to explain the recovery, which many believed to be miraculous.

Paula Kear, Chase’s mom, told the Wichita Eagle about Ambrosi’s visit, saying “He had a nice long talk with Chase, and I didn’t get the feeling that he thought this was all a lot of malarkey.”

The investigator also met with Chase Kear’s doctors, including neurosurgeon Raymond Grundmeyer, who also considers Kear’s survival a miracle.

Speaking with CNA in a Thursday phone interview, Fr. Hotze said the diocesan phase of the investigation was still underway but had advanced to the point that a postulator could come to investigate.

The relevant doctors gave “favorable responses” to the investigation, were “eager to cooperate” and expressed their belief the investigation was worth pursuing.

“There was no medical reason for those that were healed the way that they were,” Fr. Hotze added. ….

Go here for the rest of the story.

More on Father Emil Kapaun’s life and heroism is here.