The Sound Of Desperate Back-Pedaling: The Nashville Tennesseean, Front Page Saturday 7/24

The tone has begun to change, perhaps, at The Nashville Tennessean. The most loyal Democrat paper ever published, they've never seen a idea to expand government or spend more tax dollars they don't just love. All the ills of the world exist because Republicans are allowed to exist. AlGore cut his teeth there (how did that happen? Maybe his daddy made a couple of phone calls?), and is their patron saint.

They've stuck to the Party Line, even as their circulation shrinks, and their readership lets them know how unhappy they are. Ni modo, ya'll. We're the Tennessean, we know better!

Last month, it was this:

It's all them tax breaks--that's why the gubbermint is in trouble. We needs us more taxes! That'll fix our problems!

The back-pedaling may be finally beginning, as reality is setting in.

Now, this:

Only OS found this on the front page of the paper on Saturday. It's an AP story, not generated locally. But the editors exercised the choice to put it on the front page, and to leave that little nugget in the fourth paragraph--that little 'should he seek re-election' zinger. This from the folks who breathlessly covered every word and detail of The One's historic salvation of our poor nation, etc. etc.

WASHINGTON — New estimates from the White House on Friday predict the budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends.

That's actually a little better than the administration predicted in February.

The new estimates paint a grim unemployment picture as the economy experiences a relatively jobless recovery. The unemployment rate, now averaging 9.5 percent, would average 9 percent next year under the new estimates.

The Office of Management and Budget report has ominous news for President Barack Obama should he seek re-election in 2012: a still-high unemployment rate of 8.1 percent. That would be well above normal, which is closer to a rate of 5.5 percent to 6 percent. Private economists don't think the unemployment rate will drop to that level until well into this decade.

Hello, there!

"The U.S. economy still faces strong headwinds," the OMB report says. They include tight credit markets, a high inventory of unsold housing and retrenchment by state governments bound by balanced-budget mandates. The European debt crisis has also had an impact.

"Despite these headwinds, the administration expects economic growth and job creation to continue for the rest of 2010 and to rise in 2011 and beyond," the report says.

The report lands squarely in the middle of a raging election-year Washington debate about spending and taxes. With millions of Americans still unemployed and with tax cuts enacted during George W. Bush's presidency expiring at the end of this year, Republicans and Democrats are fighting intensely over how to create jobs while saving money.

Both parties are certain to seize upon the new numbers. Republicans have
consistently bashed Democrats for what they call out-of-control spending on things like Obama's stimulus package and the health-care overhaul. Democrats counter that the health-care bill and other initiatives will actually slash the deficit over time and create jobs.

Although the gaping deficits are of increasing concern to voters, Obama and Democrats controlling Congress are mostly taking a pass on deficit reduction this year as they await possible recommendations from his deficit commission.

While there's a slight improvement in the deficit for the current year compared with the administration's February forecast, next year's predicted $1.42 trillion worth of red ink — 37 cents of borrowing for every dollar spent — is looking worse. It's about $150 billion more than previously predicted because of still-slumping tax revenues.

The current record holder is the $1.41 trillion deficit for 2009.

Economists agree that the most important measure of the deficit is against the size of the economy. Many say a deficit of 3 percent of gross domestic product is sustainable since it would stabilize the overall debt when measured relative to the economy.

The report puts the deficit at 10 percent of GDP this year and 9.2 percent of GDP next year. It would never reach the 3 percent figure under Obama's predictions — which underestimate war costs and depend on assumptions of tax hikes that may not materialize.

OMB Director Peter Orszag said the numbers represent a "fiscal situation that requires attention."

Well, yes. Even behind those hallowed desks on Broadway in Nashville, where reality hasn't paid a visit in a long, long, time.