August 12, 2009

Crutsinger’s Crud, Part 2: AP Reporter Again Erroneously Cites Cost of Wars As ‘Major’ Deficit Factor

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Does the Associated Press’s Martin Crutsinger moonlight as a Code Pink operative?

There has to be something that explains what I’ll call his Iraqnaphobia.

Last month (at NewsBusters; at BizzyBlog), the AP reporter erroneously cited the cost of the wars in Iraq and Afghanistan as a “major factor” explaining why “the deficit has widened.” In a quick review of the related June 2009 Monthly Treasury Statement, I cited three examples of higher spending in other areas of government that were larger than last year, both in dollar and percentage terms, than the $33 billion, 7% increase in total defense spending. NB commenter Arminius further pointed out that “Our military spending amounts to 5 percent of GDP. Iraq and Afghanistan amount to 15 percent of that 5 percent. Obviously, as Tom notes, larger culprits are responsible for the massive deficit.”

It’s simply not possible that the two wars could be a “major factor.” No matter – This month, in an otherwise fairly decent report, Crutsinger did it again (bold after title is mine):

Federal deficit higher in July, $1.27T this year

The federal deficit climbed higher into record territory in July, hitting $1.27 trillion with two months remaining in the budget year.

The Treasury Department said Wednesday that the July deficit totaled $180.7 billion, slightly more than the $177.5 billion economists had expected.

The Obama administration is projecting that when the current budget year ends on Sept. 30, the imbalance will total $1.84 trillion, more than four times last year’s record-high.

The soaring deficits have raised worries among foreign owners of U.S. Treasury securities including the Chinese, the largest holder of such debt.

Massive amounts of government spending to combat the recession and stabilize the U.S. financial system have pushed the deficit higher. The cost of wars in Iraq and Afghanistan, along with depleted government tax revenues, also are major factors.

This time, referring to Table 3 the July Monthly Treasury Statement, total defense spending through ten months of the fiscal year has been $531 billion, up 8.1% from $491 billion at the same time last year. That $40 billion difference hardly is “major” in the context of a total deficit increase so far this year of almost $900 billion ($1.266 trillion through July 31, compared to $377 billion last year). If Arminius’s 15% estimate for the cost of the two wars as a percentage of the total defense budget is accurate (that would annualize out to about $100 billion, which seems about right based on information I have seen in previous years), you could zero out the entire war effort and not even make a 10% dent in the projected year-over-year deficit increase of almost $1.4 trillion ($1.84 trillion this year vs. $455 billion last year).

Bigger contributors to the enlarged deficit on the spending side Crutsinger should have individually cited, instead of lumping them all into a “spending to combat the recession” catch-all, include:

  • HHS, up $95 billion, or 16.3%.
  • Department of Labor, up $62 billion, or 131% (you read that right).
  • Social Security Administration (mostly not a recession-related increase), up $62 billion, or 11.4%.
  • “Other” (all within Treasury Department itself, not described in detail anywhere else), up $232 billion, or 228% (you read that right).

On the collections side, the roughly $550 billion decline in receipts through 10 months ($1.74 trillion this year vs. $2.29 trillion last year, before other adjustments I would normally make, but won’t now in the interest of space) is almost 14 times bigger than the total increase in defense spending, and totally dwarfs whatever miniscule increases might have occurred in the Iraq and Afghan theaters of the War on Terror (am I allowed to say that?).

On this one, Crutsinger is clearly cracked. The AP is pathetically ignorant and/or deeply negligent in allowing his Iraqnaphobia to stand uncorrected, as it almost surely will.

Cross-posted at NewsBusters.org.

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