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Marcus Feldman

Author ››› Marcus Feldman
  • CNN's State Of The Union Downplays The Consequences Of Default

    Blog ››› ››› MARCUS FELDMAN

    CNN's State of the Union downplayed the economic consequences of not raising the debt ceiling, claiming "there is a way" for the federal government "to pay the bills." Economists, however, have warned that a default would have catastrophic effects. Moreover, even if the federal government could stave off default by prioritizing interest payments, the decline of government spending would create "a massive demand shock to the economy."

    On State of the Union, during a discussion of the consequences of failing to raise the debt ceiling, Wall Street Journal editorial board member Stephen Moore downplayed the impact of a default, arguing: "There's no default. The Treasury bills get paid before anything else does." Host Candy Crowley responded by saying, "There is a way to pay the bills, but it is unsettling, you would agree."

    But in fact, economists have warned that not raising the debt ceiling would be economically calamitous for the United States. Following Republican threats not to raise the debt ceiling in 2011, Moody's analytics chief economist Mark Zandi warned of the economic ramifications of a possible default, writing that "financial markets would unravel and the U.S. and global economy would enter another severe recession." A June 2011 letter to congressional leaders, signed by 235 prominent economists, warned of the deleterious impact to the U.S. economy if the debt ceiling was not raised:

    Failure to increase the debt limit sufficiently to accommodate existing U.S. laws and obligations also could undermine trust in the full faith and credit of the United States government, with potentially grave long-term consequences. This loss of trust could translate into higher interest rates not only for the federal government, but also for U.S. businesses and consumers, causing all to pay higher prices for credit. Economic growth and jobs would suffer as a result.

    The Economic Policy Institute noted that even if the federal government were able to prevent default by prioritizing interest payments on the debt, the resultant ceasing of government spending would create "a massive demand shock to the economy." EPI explained:

    Even if the Treasury were able to avoid officially defaulting on the debt by prioritizing interest payments, the government would have to immediately cut expenditures by roughly 10 percent of that month's GDP, and more than that as time went on. This means Social Security checks would be cut, doctors would not be reimbursed in full for seeing Medicare and Medicaid patients, and private contractors doing business with the federal government would not be paid. All of this would constitute a massive demand shock to the economy.

    A Treasury Department report, titled "Debt Limit: Myth v. Fact," stated that efforts to prioritize payments on the national debt above other legal obligations "would not prevent default, since it would seek to protect only principal and interest payments and not other legal obligations of the United States from non-payment":

    Suggestions that Congress could somehow evade responsibility for raising the debt limit by passing legislation to "prioritize" payments on the national debt above other legal obligations of the United States are simply not true. This would not prevent default, since it would seek to protect only principal and interest payments and not other legal obligations of the United States from non-payment. Adopting a policy that payments to investors should take precedence over other U.S. legal obligations would merely be default by another name, since the world would recognize it as a failure by the United States to stand behind its commitments. It would therefore bring about the same catastrophic economic consequences. 

  • Rush Limbaugh Mocks Fact That Unemployment Benefits Are Stimulus

    Blog ››› ››› MARCUS FELDMAN

    Rush Limbaugh denied that unemployment benefits have a positive effect on the economy, saying it's a "croc" that extending them translates into economic growth. In fact, studies show that these benefits stimulate the overall economy and provide greater economic impact on growth than the Bush tax cuts for upper-income earners.

    Discussing the budget negotiations on his Monday radio show, Limbaugh mocked the fact that unemployment insurance spurs economic growth, saying "the people who voted for Obama believe that croc." He went on to say that "it's magical" that unemployment benefits stimulate the economy without jobs, adding, "Of course, this is all a croc."

    Economists, however, have repeatedly pointed out that unemployment insurance stimulates the economy -- a fact Limbaugh has refused to acknowledge. Mark Zandi, Moody's Economy.com chief economist and a former adviser to Sen. John McCain, ranked extended unemployment benefits behind only food stamps in terms of economic "bang for the buck."The Economic Policy Institute created the below graph based on Zandi's figures:

  • Conservative Media Shrug At The Thought Of Another Recession

    ››› ››› DAVID SHERE, MARCUS FELDMAN & HANNAH GROCH-BEGLEY

    Right-wing media figures are urging Republicans to refuse to compromise on budget and taxes, action that would induce automatic government budget cuts and broad tax increases and herald another recession. But economists agree that a budget deal needs to include some tax increases, which would significantly raise revenue, and that more revenue must be part of a balanced solution to lowering the deficit.

  • Fox Hosts Grover Norquist To Push Tax Myths Amid Spending Negotiations

    ››› ››› MARCUS FELDMAN

    Fox News hosted Americans for Tax Reform president Grover Norquist to advance a number of misleading and false claims aimed at undermining President Obama's tax plan. In reality, Obama's proposal includes significant spending cuts, raising taxes on the wealthiest households will not hurt the economy, and Americans support raising taxes on high-income earners.

  • MSNBC's Todd, WSJ Cover For Romney's Misleading Ohio Jeep Ads

    Blog ››› ››› MARCUS FELDMAN

    There has been strong criticism from Chrysler, GM, fact checkers, and local media in Ohio of the Mitt Romney campaign's false claims that Chrysler is shifting its Jeep production line from the United States to China. But in reporting on the story, MSNBC's Chuck Todd attempted to shield Romney from criticism by claiming that the campaign would not have run its Jeep ad in Ohio had it known there would be such strong pushback from Chrysler and GM.

    In fact, the Romney campaign went ahead with its television ad in Ohio on October 27 even after Chrysler had already pushed back on erroneous claims that Jeep is sending U.S. jobs to China. In a statement on October 25, Chrysler wrote on its website that "Jeep has no intention of shifting production of its Jeep models out of North America to China."

    Yet, on October 26, Romney falsely claimed that "one of the great manufacturers in this state, Jeep -- now owned by the Italians -- is thinking of moving all production to China." The next day, the campaign debuted a TV ad in Ohio that echoed that false claim.

    Another ad repeating the same debunked claim started airing on October 30.

    But during a discussion of the Romney ad on MSNBC's Morning Joe, Todd stated: "I don't know whether they thought the ad would actually encourage GM and Chrysler to repudiate them. I think -- I wonder if they thought that was going to happen, whether -- if they knew that was gonna happen, whether they would have gone up with this ad."

    On the same day that the Romney campaign released its false radio ad, both Chrysler and GM issued statements condemning the ads as untrue. GM spokesman Greg Martin stated: "No amount of campaign politics at its cynical worst will diminish our record of creating jobs in the U.S. and repatriating profits back to this country." Chrysler CEO Sergio Marchionne reaffirmed that "Jeep production will not be moved from the United States to China," adding: "It is inaccurate to suggest anything different."

    Similarly, the Wall Street Journal cast the repudiation of the Romney ads by Chrysler, GM, and the Obama campaign as mere controversy between dueling campaigns, writing that the "two campaigns sparred Tuesday" over the ads.

  • Limbaugh Imagines Pre-Debate Collusion Between Obama Team And CNN's Crowley

    Blog ››› ››› MARCUS FELDMAN

    Rush Limbaugh is attempting to further undermine CNN's Candy Crowley's fact check debunking Mitt Romney's false claim that President Obama waited two weeks before calling the attack in Benghazi, Libya, an act of terror. Limbaugh claimed that Crowley's correction was proof of a "coordinated" effort between the Obama campaign and moderator Crowley before the debate.

    In fact, during CNN's post-debate coverage, Crowley addressed the fact check and explained that she had prepared for the debate by going over what had been reported about Libya and remembered Obama's comments about the attack.

    During his show, Limbaugh began the discussion by asking: "Who from the Obama team is meeting with Bob Schieffer today?" When questioned off-camera about the question, he replied: "Well, because I think somebody from the Obama team met with Candy Crowley" and apparently reminded her of Obama's September 12 comments, which were the basis for her fact check.

    During the October 16 presidential debate, Crowley corrected Romney's false claim that it took Obama 14 days to call the attack on the U.S. Consulate in Benghazi an act of terror. In fact, as Crowley noted, Obama referred to the attack as terrorism on September 12.

    But presumably referring to a September 30 interview Crowley conducted with senior Obama adviser David Axelrod on State of the Union, Limbaugh stated: "Candy Crowley herself knew that Obama did not call Benghazi a terror attack, and then somebody two weeks before the debate called her attention to the fact that she had, and gave her that transcript."

    Limbaugh went on to suggest that Axelrod may have pointed her toward Obama's September 12 comments and told her to mention the transcript if the issue came up.

    In fact, addressing the fact check on CNN after the debate, Crowley stated: "Well, you know, again, I heard the president's speech at the time. I sort of re-read a lot of stuff about Libya because I knew we'd probably get a Libya question, so I kind of wanted to be up on it. So we knew that the president had said, you know, these acts of terror won't stand or whatever the whole quote was."

    Limbaugh previously denounced Crowley's correction, saying she committed an "act of journalistic terror or malpractice." He went on to say: "If there were any journalist standards, what she did last night would have been the equivalent of blowing up her career like a suicide bomber."

  • Fox's Guilfoyle Covers Up Romney's Support For Overturning Roe V. Wade

    Blog ››› ››› MARCUS FELDMAN

    Fox News host Kimberly Guilfoyle covered up Mitt Romney's extreme position on reproductive rights, claiming that Romney "didn't say that he was going to overturn Roe v. Wade," the 1973 Supreme Court decision that established a legal right to abortion. But Romney has clearly articulated his desire that the ruling be overturned.

    On October 15, Fox News' The Five played an ad from MoveOn.org critical of Romney's positions on women's health. Commenting on the ad, Guilfoyle said, "Mitt Romney didn't say that he was going to overturn Roe v. Wade. That's an absolute falsehood."

    Fox's attempt to conceal Romney's extreme stance on reproductive rights echoes Romney's efforts to moderate his position on abortion. In a recent interview with The Des Moines Register's editorial board, Romney said: "There's no legislation with regards to abortion that I'm familiar with that would become part of my agenda."

    But the fact is that Romney has clearly outlined his support for overturning Roe v. Wade, which he has called "one of the darkest moments in Supreme Court history." According to his website:

    Mitt believes that life begins at conception and wishes that the laws of our nation reflected that view. But while the nation remains so divided, he believes that the right next step is for the Supreme Court to overturn Roe v. Wade -- a case of blatant judicial activism that took a decision that should be left to the people and placed it in the hands of unelected judges. With Roe overturned, states will be empowered through the democratic process to determine their own abortion laws and not have them dictated by judicial mandate.

  • Fox News Reimagines Amb. Susan Rice's Remarks On Libya Attack

    ››› ››› MARCUS FELDMAN

    Fox News commentators have reimagined U.S. Ambassador Susan Rice's statements about the consulate attack in Benghazi, saying Rice was "so definitive" in Sunday show interviews about what had happened there. In fact, Rice repeatedly made clear during her interviews that definitive conclusions would only follow from an administration investigation, which she stressed was under way.