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Friday, October 11, 2013
WND Promotes Debt Limit Denialism
Topic: WorldNetDaily

Unsurprisingly for a website that is trying to con readers into giving it money to tell members of Congress not to raise the debt ceiling, WorldNetDaily is rather desperate to push the myth that not raising the debt ceiling has no consequences.

Bob Unruh writes in an Oct. 8 WND article:

President Obama has been using the threat of a “default” to persuade House Republicans to fund his newly implemented health-care law and the rest of the heavily indebted federal bureaucracy, as well as end the government shutdown.


Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi both have followed the party talking points, encouraging Americans to “avoid default” by having the GOP give the president what he wants.

The  problem, however, is that the Democrats’ threat of default is not reality, according to leading economists.

Unruh then repeats claims from various sources claiming that there is no threat of default because the federal government would still be receiving enough in revenue to pay interest on the money it has borrowed.

Garth Kant followed with an Oct. 9 article:

A growing number of economists and politicians say President Obama is just factually wrong when he claims the United States is risking default by not raising the debt celing.

They also say Obama is mistaken in claiming that failure to raise the debt ceiling would be a disaster, or as he put it, “insane, catastrophic, chaos.”

One famous economist even goes so far as to portray the president’s dire warnings as outright dangerous and irresponsible. CNBC’s Lawrence Kudlow accused the president of threatening “to pull the whole system down for (his) own gain.”

But as economist Jared Bernstein points out, even if the federal government paid its creditors, there is not enough money to pay all expenses, and that is "default by another name."

Both Unruh and Kant reference the claim that default could be avoided by prioritizing expenses. But that's a fallacy as well: Experts say such prioritization is unworkable and legally dubious, in that the Treasury Department doesn't have the legal authority to prioritize payments.

Unruh and Kant dismiss or ignore entirely such arguments. That's not good journalism.

Posted by Terry K. at 2:36 PM EDT

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