MediaWatch: March 1992

Vol. Six No. 3

More Unreliable Liberal Statistics

CAPITAL GROANS. Why are the media covering the debate over the capital gains tax by relying on estimates which have been proven to be more than 100 percent wrong? On February 7, Rep. Dick Armey, the ranking Republican on the Joint Economic Committee, and Chris Frenze, one of Armey's staff economists, revealed that the Democrat-appointed Congressional Budget Office (CBO) admitted its forecast for capital gains of $254 billion for 1990 missed the mark by $134 billion, or an error of more than 105 percent. The media's response: nothing.

Why the silence? Because the major media covering the capital gains debate routinely rely on estimates of the Joint Committee on Taxation (JCT), which relies on the faulty CBO numbers for its calculations. When, for example, the February 10 Time cites that "families that earn more than $200,000 a year would save an average of $18,000 as a result of lower capital gains rates," it's citing the completely bogus calculations of the JCT. Many reporters are using these estimates without any concern for their accuracy, but they haven't asked why the CBO refuses to admit its errors to the media or Congress. If editors make no corrections, it proves they prefer a class war fought over fake statistics to an honest debate.