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I could not even finish my bowl of raisin bran this morning because of an article in the Atlanta Journal Constitution that attempts to explain the basics of the fiscal cliff. The article includes an error that I know will feed the feeble minds of the anti-tax crowds. For a quick diary about the matter, please jump.

The "'cliff' primer" offered by the AJC is split up into sections headed with rhetorical questions like "What is the fiscal cliff, anyway?" Reading the section entitled "Why would recession happen?" gave me a start. It completely omits the effect of spending reductions on the GDP (and it includes a funny typo):

Why would recession happen? "If the government gets more revenue, people have less money to spend on other things. When taxes go up, the economy does (sic) down." -- Georgia State University economist Rajeev Dhawan
So, I just sent this note to the authors of the article...  I hope it has some effect.
Dear [authors],

There is a glaring omission in your article that needs to be corrected in a written column in tomorrow's paper with an equally large headline.

Your explanation of "Why would recession happen?" is only half correct. It omits entirely the effect of reduced spending on the economy. I am not an expert, but it requires very little digging to find that the Congressional Budget Office predicts a 1 & 1/2 percent effect on GDP from the taxation portion of the cliff and a 3/4 percent effect from the spending portion of the cliff. See https://cbo.gov/...

Also, as the CBO notes, the two effects do not work in the same manner:

    The estimated economic effect next year of those changes in spending is about half the estimated effect of extending the expiring tax provisions, even though the budgetary impact of the changes in spending is less than one-quarter of the impact of the changes in taxes. The larger “bang for the buck” next year of the spending policies under the alternative fiscal scenario occurs because, CBO expects, a significant part of the decrease in taxes (relative to those under current law) would be saved rather than spent.

Your omission is important, because, as written, your article puts all the emphasis on the tax element, fueling the minds of trickle-down economic theorists who would hold this country hostage to their narrow minded economic thinking.

Please issue a correction as soon as possible.

Originally posted to Ticonderoga on Sun Nov 11, 2012 at 05:00 AM PST.

Also republished by Kos Georgia.

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Comment Preferences

  •  Tip Jar (10+ / 0-)

    "The best lack all conviction, while the worst [a]re full of passionate intensity." Yeats: "The Second Coming" (1921)

    by Ticonderoga on Sun Nov 11, 2012 at 05:00:30 AM PST

  •  Naked capitalism blog has had a recent run in (2+ / 0-)
    Recommended by:
    whaddaya, Wolf10

    with tge CBO that you might be interested in.  See today's edition.

  •  The Yurnal (2+ / 0-)
    Recommended by:
    whaddaya, Finnegan05

    I haven't followed the fortunes of the paper in the last couple of decades. After they ate, and negated, the Constitution, they headed for corporate consolidation and ever smaller staffing. They also got farther and farther to the right in their editorial policy, although the Op/Ed page would have "diversity."

    In other words, the few unique voices were hunted out, disappeared, and the replacements were compliant drones. The paper's editorial preference was corporate growth. At its best, it was Democratic Leadership Council a la Andy Young.

    It wouldn't be surprising that they exist solely to please Apharetta dwelling McMansion dwellers.

    If money is the root of all evil, then what is Mitt Romney?

    by The Geogre on Sun Nov 11, 2012 at 05:46:58 AM PST

  •  no link to ajc article? (1+ / 0-)
    Recommended by:
    whaddaya
    •  I can't find the online version of the article. (1+ / 0-)
      Recommended by:
      whaddaya

      "The best lack all conviction, while the worst [a]re full of passionate intensity." Yeats: "The Second Coming" (1921)

      by Ticonderoga on Sun Nov 11, 2012 at 06:14:49 AM PST

      [ Parent ]

      •  Why do you still read the AJC? (1+ / 0-)
        Recommended by:
        sboucher

        It's garbage. Ralph McGill and Henry Grady have been shamed. The papers heralded the dawn of a new vision of the south and now I wouldn't use it for toilet paper. It is funny you pointed out the typos because that paper is full of typos.

        But I do have to say Misty Williams and Carrie Teegarden are intelligent, progressive women who do the legacies of the late editors proud.

        We need a Georgia Kossacks group :P

        "I'm not worried. If there's something bad out there, we'll find, you'll slay, we'll party!" -- Xander

        by Finnegan05 on Sun Nov 11, 2012 at 03:53:12 PM PST

        [ Parent ]

        •  I buy it so I can do the (0+ / 0-)

          crossword while I sit at the coffee shop. I glance at the editorial pages to see what "two views of" they've got for the day (I SO hate that) and see what the idiots have written to the editor. Then I glance through the Vent, so I know what the "regular" people are thinking. Finish up with Dear Abby and the comics, and I'm done.

          It's not just a zip code, it's an attitude.

          by sboucher on Sun Nov 11, 2012 at 05:17:13 PM PST

          [ Parent ]

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