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White House. Photograph: Carolyn Kaster/AP
President Obama talking about the economy and the deficit in the White House
Many of the nation's most important news outlets openly embrace the
agenda of the rich and powerful that colors its coverage of major
economic issues. This is perhaps nowhere better demonstrated than during
the current budget standoff between President Obama and Congress,
which the media routinely describes as the "fiscal cliff". This terminology
seriously misrepresents the nature of the budget dispute, as everyone in the
debate has acknowledged. There is no "cliff" currently facing the budget
or the economy.
If no deal is reached this year, then on 1 January, daily tax
withholdings will rise by an average of about $4 per person. Any money
actually deducted from pay checks will be refunded if a deal is
subsequently reached that returns tax rates to 2012 levels. Government
spending probably won't change at the start of the new year, since
President Obama has considerable discretion over the flow of spending.
No one can think that this modest increase in tax withholdings would
plunge the economy into a recession, but the Wall Street types seeking to
dismantle social security and Medicare have used their enormous wealth
and allies in the media to generate this kind of fear-mongering across the
country.
One way in which they have pushed their agenda has been in
misrepresenting projections from the Congressional Budget Office (CBO).
The CBO's projections show that if higher tax rates and lower spending
are left in place for the whole year, then it will substantially slow growth
and push the economy into a recession. However, these projections