Mindless Budget Reporting: Fooling Some of the People All of the Time

BY Dean Baker  August 14, 2013 at 11:19 AM EDT

photo by Saul Loeb/AFP/Getty Images

The press too often misrepresents budget figures by citing them out of context, argues Dean Baker. Photo courtesy of Saul Loeb/AFP/Getty Images.

Paul Solman: *Dean Baker, co-director of the Center for Economic and Policy
Research, where he keeps the Beat the Press blog, has appeared on these pages before, most recently in “Don’t Blame the Robots,” arguing that economic inequality isn’t caused by technological advances that demand more high-paid, high-skilled workers over low-paid, low-skilled ones.*

Wednesday, he takes on the economics media for their budgetary transgressions.

Dean Baker: The New York Times budget reporters must have been celebrating this week. After all, they managed to confuse Paul Krugman, the New York Times columnist and Nobel Prize-winning economist, with their own budget reporting. That’s quite an accomplishment.
For those who missed it, Krugman wrote a column criticizing House Republicans for their plan to cut the food stamp program in half by trimming $40 billion from its budget. He might have gotten this information from an article like this one in the Times, whose first sentence told readers:

“A plan by House leaders to cut $40 billion from the food stamp program — twice the amount of cuts proposed in a House bill that failed in June — threatens to derail efforts by the House and Senate to work together to complete a farm bill before agriculture programs expire on Sept. 30.”

The problem with this description of the Republican plan is that the proposed cut of $40 billion is supposed to be over a 10-year budget window, not a single year. (The Republicans want to cut the food stamp budget by 5 percent, not 50 percent.) This information is not reported anywhere in the article. As a result, even a very intelligent and extremely knowledgeable person like Krugman could read through the piece and be off by a factor of 10 in his understanding of the size of the proposed cuts.
While Krugman was quick to catch and apologize for his mistake, this episode should prompt some new thinking among budget reporters and editors. If the New York Times is flunking accurately conveying information to Krugman, whom exactly do they think they are informing with their budget reporting?

I have long harassed budget reporters and editors over the practice of reporting large budget numbers without any context. I have argued that when people read in the paper that the government is spending $265 billion this year on Medicaid or $21 billion on child nutrition, they are not getting information, just meaninglessly large numbers.

The overwhelming majority of readers, even highly educated readers, are not budget wonks. They don’t have a clear idea of how large these numbers are. For most of them, they would be getting just as much information if they were told that the government is spending a “really big number” this year on Medicaid and a “really big number” on child nutrition. Of course, it doesn’t help matters when the news stories do not even bother to inform readers of the number of years covered by the spending, as was the case with the food stamp article.

But we don’t have to throw up our hands and just say that readers are too dumb to learn about the budget. There is a really simple alternative: Newspapers could get in the habit of writing budget numbers as shares of the total budget. While readers may not be able to make much sense of the $265 billion going to Medicaid, the vast majority would have a good idea of the importance of this spending if they were told that 7.7 percent of the federal budget goes to Medicaid.

The same could be done with multi-year appropriations. For example, the food stamp piece could have told readers that the proposed cut to the program was 0.086 percent of projected federal spending over the next decade. That may or may not be a big deal for the people losing benefits, but readers would know that it would not matter much for the budget. (The Center for Economic and Policy Research has an ultra-cool high tech calculator that allows for simple and painless calculations of these percentages.)

Polls consistently show that the public is hugely confused about where their tax dollars are going. For example, a 2011 CNN poll found that people on average thought foreign aid took up 10 percent of the budget. The actual number is less than 1 percent, as has been explained on the Making Sen$e Business Desk. They thought public broadcasting accounted for 5 percent of the budget. The actual number is 0.007 percent.

Imagine how much better the quality of public debate over the budget might be if most of the people participating had at least some idea of where their money was going.

There are certainly people who want to believe that all of their tax dollars are going to lazy good-for-nothings and they have no intention of letting the evidence change their views. But that does not explain most of the confusion on budget issues. It really is a case where the media has been incredibly irresponsible, treating budget reporting more like a fraternity ritual than an effort to inform their audience about the budget.

So come on folks, what’s the excuse? It is simple and painless to put these numbers in context. Big congratulations on fooling Paul Krugman. Now can we focus on trying to inform people?


This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions