The Wall Street Journal's Dangerously Misleading Article Over The Debt Ceiling

The Wall Street Journal just released a pretty ridiculous "opinion" article attempting to spin the debt ceiling crisis to favor the right. This is understandable. However, the article would appear to an outsider to be the legitimate educated opinion of this world renown publication. The article, entitled "Debt-Limit Harakiri," has no name attached to it. I'm not sure why that is. However, the word "we" was used, so it sounds as if it is referring to the publication itself. Any help on this would be welcome. However, to someone who does not read their articles regularly, this piece can reasonably be interpreted to reflect the views of the Wall Street Journal itself. And therein lies the problem. This article is filled with nonsense, completely misrepresenting the debate, and ignoring the real harm that can come from a failure to increase the debt ceiling. Although this article focused on Senator McConnell's political game, it made a couple very misleading and often false claims:

Yesterday [Obama] played the Grandma Card, telling CBS that seniors may not get their August retirement checks. Next he'll send home the food inspectors and stop paying the troops.

This is a very real possibility. The government would only get about $12 Billion in taxes on August 2nd and Owe $23 Billion in social security checks the next day! And that doesn't include "Medicare and Medicaid, defense contractors, and federal workers... Within 24 hours, the government would be $20 billion behind" (see link under "real"). Such an important point need hardly be "The Grandma Card."

The reality is that Mr. Obama is trying to present Republicans with a Hobson's choice: Either repudiate their campaign pledge by raising taxes, or take the blame for any economic turmoil and government shutdown as the U.S. nears a debt default.

The "campaign pledge" is to "not compromise." Seeing as how compromise is expected, necessary, and reasonable, it is therefore expected, necessary, and reasonable for Republicans to break this utterly ridiculous campaign pledge. Republicans currently have the deal of a lifetime: a 3-to-1 rate of spending cuts to tax increases! How much more can they expect the other side to compromise if they are themselves unwilling to do so as well!? Even conservative commentators and politicians have criticized Republicans for not taking this deal!

The debt ceiling is going to be increased one way or another, and the only question has been what if anything Republicans could get in return

What more do they want?! They have a damn 3-to-1 deal of spending cuts to tax increases.

We agree with those who say that Treasury Secretary Tim Geithner can cut other federal spending before he allows a technical default on U.S. debt.

Who is saying this?! As far as I can tell, it's just DeMint and Bachmann. This would mean the US would have to pay interest first. In a conversation with FactCheck.org,  Rudolph Penner,  a Republican former CBO director who is now with the liberal-leaning Urban Institute, said "The notion of paying interest first is dumb. Substantively, the revenues left over would not be sufficient to honor all our obligations and we would have to choose between paying beneficiaries of Social Security, Medicare and other entitlement programs, devastating discretionary spending for defense, highways, public safety and other vital programs, or not paying bills for goods and services already delivered to the government."
As FactCheck pointed out, the government would pretty much have to "instantly" cut spending by 34%! If they left Medicare and Social Security alone, that would mean a 53% "instant" cut from the rest of discretionary spending! That's "the active military, military pensions, veterans benefits, judges, prosecutors, highway construction, food stamps, Medicaid services for low- and middle-income workers..."

Of course, the WSJ article does mention this... However they ignore just how extreme these cuts would be. Here is how they put it:

"Instead [Obama] and Mr. Geithner will gradually shut down government services, the more painful the better."

I highlighted the word "gradually" to show just how little they take this seriously. 34-53% reductions cannot reasonably be done gradually! Remember what I pointed out before. What are they going to do about those social security checks they cannot afford? Borrow...oh wait NO! 2 Days is not "gradual" by any reasonable stretch.

One of the last lines really caught my attention:

The Obama Democrats have staged a spending blowout to 24% of GDP and rising, and now they want to find a way to finance it to make it permanent.

There are a couple things wrong with this (reference: budget tables: Dollars, %GDP):
1. He seems to blame this all on "Obama Democrats." However, the 1.4 Trillion dollar deficit from FY 2009, which came as a result of record 3.5 Trillion dollar spending, was largely set in place during the Bush administration 4 months before Obama even took office. This was 25% of GDP, the largest since World War II! It did actually go down to 23.8% of GDP in 2010. As a result, its incredibly misleading to blame it all on "Obama Democrats."
2. They said this was rising, but this is mostly false. It is only projected to rise in 2011 (25.3%). After that, it is projected to decrease every year til 2015 (22.3%), only to rise slightly in 2016 by .3%. So it is exceedingly misleading to say it is "rising."
3. Seeing as how Democrats are agreeing to 3 Trillion dollars in spending cuts over the next decade, it seems hard to believe they want to make spending as a percentage of GDP 24% forever.


Besides the right-wing spin in the article (it is to be expected from an opinion), the ridiculous falsehood/misleading-nature of the "facts" from this article make me seriously question the Wall Street Journal. The dangers associated with misleading the public into being complacent about the debt ceiling are serious! This kind of amateur analysis should not appear to come from the WSJ itself. And if it truly does, Gawd help anyone who relies on that publication!