So, I’ve been following the debt-limit debate fairly closely, especially at Megan’s, and I’m struck by two claims that have virtually no basis in reality but have somehow achieved a strange ubiquity.
First is the notion that reaching the debt limit means default. In fact, not only are revenues are about ten times interest payments, but even Social Security payments are at little risk as the system is not currently running a significant deficit. There would be considerable cuts in other government programs after Aug 2 without a debt limit agreement, but there’s no reason they would have to come from either of those areas. But even a blogger as level-headed and grounded in reality as Megan McArdle has been sounding the alarm on the red herring of default. It’s baffling.
The other oddly omnipresent claim is that Obama agreed to entitlement reform and was spurned. Despite Boehner’s complaint that Obama took entitlements off the table so fast his position was like Jello and the absence of any actual specific plan, many seem to think Obama made such an offer. I expect such dishonesty from Paul Krugman (whose “disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults” is well-known) but the meme is creeping into hard news as well. As best I can tell, the closest Obama has come to actually offering anything specific on entitlements was vaguely raising the notion of means-testing Medicare just this morning. I guess that’s supposed to be some kind of compromise in that it punishes the rich but with entitlements instead of taxes. Hooray!