AP‘s Calvin Woodward charges that
Democratic presidential candidate Barack Obama was less than upfront in his half-hour commercial Wednesday night about the costs of his programs and the crushing budget pressures he would face in office.
For instance, Woodward responds to Obama outlining his economic proposals by noting: “His proposals–the tax cuts, the low-cost loans, the $15 billion a year he promises for alternative energy, and more–cost money, and the country could be facing a record $1 trillion deficit next year.” The unspoken assumption here is that because the country is in the midst of a financial crisis that has incurred huge bailout costs, the federal government will need to cut spending or raise taxes in order to reduce the deficit.
This economic analysis is quite controversial, to say the least–economist Dean Baker (10/9/08) says this approach “make[s] about as much sense for the economy as nuking Silicon Valley.” If Baker is too progressive for your economic tastes, here’s conservative Martin Feldstein arguing that “the only way to prevent a deepening recession will be a temporary program of increased government spending.” Yet AP presents deficit-cutting in the midst of a recession as it-goes-without-saying common sense.
The only support that Woodward provides for his claim that Obama’s failure to offer an austerity program as a response to the economic crisis means that he is being “less than upfront” with the voters is this passage:
The nonpartisan Tax Policy Center, whose other findings have been quoted approvingly by the Obama campaign, says… “Neither candidate’s plan would significantly increase economic growth unless offset by spending cuts or tax increases that the campaigns have not specified.”
The Tax Policy Center report in question (9/15/08) provides no elaboration on this rather peculiar economic advice. The conventional wisdom is that tax cuts and spending increases stimulate the economy, whereas tax increases and spending cuts tend to slow it down; if AP has discovered evidence to the contrary, that should be the headline–it’s bigger news than a mere Obama infomercial.