CNN has posted the current story about Standard & Poors downgrading its estimate of the US economic outlook: US Credit Rating Outlook Lowered by S&P”. This is big stuff: the Dow dropped plummeted on the news.
In the process, and for whatever reason, CNN has drastically distorted the degree of the problem, and put a baseless pro-administration spin on this story.
First, there is the curious sub-head “Deficit hawks: Not too bad, Mr. President”, which is not supported by anything in the story, unless it is the statement by an unnamed “Treasury official” that all is well. Since when are Treasury officials “deficit hawks”?
Second, there is the matter of the size of our deficits and our debt.
“In 2003-2008, the U.S.’s general (total) government deficit fluctuated between 2% and 5% of GDP. Already noticeably larger than that of most ‘AAA’ rated sovereigns, it ballooned to more than 11% in 2009 and has yet to recover.”
Here is CNN’s version:
“From 2003 to 2008, the nation’s general government debt varied between 2% and 5% of GDP, which is “noticeably larger” than other countries with “AAA” ratings, according to S&P.”
One would expect CNNMoney reporter to know the difference between “debt” and “deficits”. If our general government debt were only 11% of GDP, all would be well. But in fact, our $1.35 trillion deficit is the amount added each year to our $14.24 trillion total debt. Our debt is over 100%, not 11%, of our GDP.
Another curious subhead is this one: “Meanest Budget Cuts”. Again, it is followed by nothing even remotely related to the subhead.
The most important single piece of the story is buried well into the second half. “The agency has never lowered its outlook for the United States, and the nation has never had a rating lower than AAA.” Somehow, I would think this merits a subhead: “Has Never Happened to US”, or “Worst Outlook Ever for US”.
Look, I don’t know much about economics at this level, and I don’t know what to do to balance the budget. But I know bias when I see it.
Overall, this is pretty shoddy reporting, CNN.
As of Tuesday morning, CNN has edited the story, removing the absurd ““Deficit hawks: Not too bad, Mr. President”, and replacing it with a pop-up “Take CNNMoney’s Deficit Quiz” (the quiz doesn’t clarify the difference between debts and deficits, so CNNMoney’s reporters won’t find enlightenment there.)
The other three distortions I’ve identified remain in the story.
I have the original web page saved, in case you want evidence of the original version.