Sloppy Reporting on Greece
By David Henderson
Demonstrators and police clash Friday near the Greek parliament in Athens. Greece has frozen pensions and increased taxes to cut spending by 4.8 billion Euros in a bid to persuade the EU it can avoid default. See A10.
So reads the caption under the picture on the front page of today’s Wall Street Journal. What’s wrong with the caption? It’s false. The Greek government doesn’t plan to cut spending by 4.8 billion Euros. Rather, it plans to cut the deficit by $4.8 billion Euros, with a combination of spending cuts and tax increases.
This isn’t a picky distinction. What this error shows, at best, is how cavalier reporters tend to be about distinguishing between budget cuts and deficit cuts. At worst, it shows that they have accepted a language that you often hear from U.S. congressmen in which cuts in budget deficits are referred to as “savings” even if they include tax increases.