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The student loan program will cost . . .

Which of these headlines seems more informative to you?

The top one just gives you a number with no context. Is it a big number? A small one? Is it for one year? How does it compare to the rest of the budget?

The other two headlines give you context: the loan program will amount to about ¼% of the total federal budget and will increase the annual deficit by 1-2%. That's enough to give you some idea of whether you think it's worth it or not.

So why did the New York Times run the top headline? As it happens, this is a 30-year estimate, and averages about $15 billion per year compared to a total federal budget of about $6 trillion. But you wouldn't know this unless you already know how big the budget is, how big the deficit is, and how it changes over time. But how many people know that? Even I had to look it up.

So why not skip the meaningless big numbers and write headlines and stories that provide context for this stuff? The easiest way is to use simple percentages, but there are other ways too. All of them are better than the big meaningless number.¹

¹Or, hereafter, BMN.

63 thoughts on “The student loan program will cost . . .

  1. MontyTheClipArtMongoose

    Because the total dollar number stokes righteous budgethawk fury, & will have Simpson-Bowles heads hot to vote out the rotten to the core Democrat elite & replace them with fiscally-sensible GQPers.

    1. cmayo

      It's this.

      Big paper journo types have always been in this camp, whether intentionally or not. It's just the culture they were "raised" in or to join and perpetuate. It's garbage and bullshit.

      Honestly, I wouldn't care about the reporting of BMN's as long as they were consistent in terms of timeframe: they should always be reported in terms of yearly figures. But I guess that would ruin the whole game of making it seem Big and Scary and the subtext of wecan'tdothatbecauseitwould(somehow)fuckoverBoomers.

      I say yearly because most people conceptualize budget numbers in yearly terms.

      It's another reason why the 10-year figures for the regular budget fights do nothing but help Republifucks, because 10-year numbers for expenses seem huge and nobody ever talks about how fucking rich this fucking country is and that we can goddamn afford it.

    2. Jasper_in_Boston

      Not everything is a right wing conspiracy.

      The most straightforward way to phrase it is to give the number, especially if that's the wording CBO uses. Ideally in the headline that would be combined with the addition of "over 30 years." I fault the Times for not doing the latter.

      The Times will get accused of making the administration's case for it if they cite a percentage as Kevin suggests. At the end of the day it's not their fault that broad swaths of the public are substantially innumerate.

  2. KenSchulz

    Dean Baker is always after journalists for exactly this error. And the NewYork Times is one of the perennial offenders. You might think that a publisher that large could find someone on staff capable of doing long division, but apparently not.

    1. Jasper_in_Boston

      It's not an error. $400 billion is the figure provided by CBO. The Times is simply repeating in the headline what the Congressional Budget Office has told us. It's a perfectly legitimate use of a valid number. I haven't read the article, so, I can't say whether they provided context or not. If they didn't, THAT would be an error. (IIRC they did use a sub-head to the effect of "over 30 years" —which is fine).

      I'm guessing if you saw that headline (as I did earlier today) YOU wouldn't have gotten the impression that it's a gigantic sum in the context of the US economy, because you (just like me) know that economy is likely to produce north of one quadrillion dollars of output over 30 years. Again, that this kind of understanding of large numbers isn't exactly common doesn't mean a newspaper has to shape its headlines accordingly. That (context, nuance, detail) is what the body of the article is for.

      1. Ken Rhodes

        What he said! The reader is presumed to be able to read.

        And BTW, the actual number is *critically important* if you want to be able to compare it to alternative uses for the same money. Think of this, for example:

        For the typical school meal program, the average reported cost to produce a school lunch was $3.81, compared to the average federal free lunch subsidy of $3.32.

        Citation: School Meal Statistics - School Nutrition Association
        https://schoolnutrition.org › About School Meals

        If you round that up to $4 per lunch, and round up the federal contribution to the entire cost, that means the same money could be used to provide 100,000,000,000 free school lunches. Read that slowly--one hundred billion free school lunches. That's a LOT of value, which means that somebody has to be making value assessments of choices in how we taxpayers will get best value for our money.

      2. KenSchulz

        Journalism aspires to be more than regurgitation of press releases; it wants to be seen as keeping the public informed. That should impose a responsibility to be as informative as possible. You might be surprised to learn that this is quantifiable. Part of my work was writing and testing communication materials. Have newspapers tried surveying readers to find out how well they understand reports on government spending after reading their articles?
        As Ken Rhodes notes, there are lots of ways of putting the student-loan (partial) forgiveness program in context by comparing to other programs. For example, the individual limits could be compared to, oh, the median forgiveness received by members of Congress who applied for PPP loans. Or the total annual amount could be compared to what Americans spend on alcoholic beverages, or to government agricultural subsidies.

        1. Jasper_in_Boston

          It was way more than a regurgitation. I ended up reading the article. It was a reasonably detailed effort. What Kevin and you all seem to be disagreeing with is the headline. I think the headline was defensible, because it was an accurate, anodyne use of the English language. Newspapers can't be held responsible for people who only read headlines.

          For those Times readers who bothered to read the article, a rather detailed explanation was provided.

    2. MontyTheClipArtMongoose

      Dean Baker will be right on it. Just like FIRE will be going after the Idaho legi for making discussing abortion on any Gem State college campus a crime.

  3. megarajusticemachine

    Can't have the Democrats scoring any points without fearmongering over it! "Here's How This I s Bad For Biden..."

  4. Keith B

    They probably do this deliberately because $400 billion sounds like a big number and it will get people's attention, while 1/4 of a percent will make most people shrug and not bother to read it. That and the fact that most people are innumerate and most journalists probably are as well.

    1. Jasper_in_Boston

      because $400 billion sounds like a big number and it will get people's attention, while 1/4 of a percent will make most people shrug and not bother to read it.

      I'm not sure that anyone ought to complain if a newspaper tries to prompt subscribers to read its stories. Can you blame them?

      In any event, $400 billion is a big number, by any reasonable definition. And while it's true it's arguably not a lot of coin in the context of the quadrillion aggregate GDP of the United States over the next three decades, it's not the Times's job to give readers that impression via the headline alone. IOW, if they were using this technique to describe a spending priority that liberals despise ("Trump's border wall is going to cost .00001% of GDP!") people on the left would quite rightly be annoyed.

      If the Times fails to provide context in the body of the article, then Kevin has a legitimate complaint.

      1. ScentOfViolets

        If the Times fails to provide context in the body first paragraph of the article, then Kevin has a legitimate complaint.

        FIFY. You _have_ heard of 'burying the lede', right?

  5. golack

    cue the minor cords and dark videos....

    Do what the Republicans do--dynamic scoring!!! The student loan forgiveness will promote growth and generate more in tax revenue than it costs!!!

    1. rick_jones

      For some definition of couple and few…

      Some web searching suggests the Ford class carrier is $13.3 billion. Call it $20 billion and that’s still 20 of them.

      The F-35 looks to be < $150 million so that would be over 2500 of them.

  6. erinsmyrick

    I taught social studies and math to middle school for over 10 years. I spent time trying to put numbers into perspective for both my math students and social studies classes. I spent extra time analyzing graphs and charts in both subjects. My biggest frustration with mainstream news is the way they present numbers without context. Either they assume that regular people understand the numbers or they are trying to mislead. Most people once numbers become very large are meaningless. Most people couldn’t explain how much more 1 billion is than 1 million. For most people it’s an amount that they have no experience with and therefore is meaningless.

    1. Jasper_in_Boston

      My biggest frustration with mainstream news is the way they present numbers without context.

      Have you read the article and are you claiming they didn't provide context?

  7. bebopman

    Now you’ve done it. You’ve set me off.

    As a guy who used to write newspaper headlines (a zillion years ago), let me take a shot at justifying the first head. Keith B is right in that in a story like this with head specs like that, it’s really difficult to give a proper perspective on the impact of the loan program. “$400 billion” grabs the reader’s attention and, hopefully, gets the reader to read at least a few paragraphs of the article to get a fuller picture that the headline can’t provide.

    Still, in my view, the head could be better. Here’s my suggestion (as I reach back into parts my brain not used on about 40 years):
    You don’t need “U.S.” So first line should be:
    Student Loan Plan Could Cost ….
    with a slight squeeze on point size or kerning,
    Or, if necessary, “could” could be “may” and “student” could be “school”, although “could” and “student” would be better.

    That frees 2nd line to be:
    About $400 Billion in 30 Years
    (again, with a little squeeze. If necessary, replace “about” with the not-nearly-as-good “near” or let the “could” or “may” in the first line do the work of “about”.)

    And depending on the newspaper or edition, try all that in a very short period of time, especially if you’re a slot editor rewriting someone else’s head at deadline. We can’t all spend days writing a headline for monthly magazines. (Yeah, I’m looking at you, Ma Jones.)

    So, I think it should be:
    Student Loan Plan May Cost
    $400 Billion Over 30 Years

    Or something like that. Headline 2 and 3 make the plan seem too small, and fewer people will bother to read the article. I don’t care how small a percentage it is. $400 billion could pave a few roads, feed a lot of hungry kids or fix a water system in the third-world South. The article can play “it’s not so big” once the reader is pulled in.

    1. Jasper_in_Boston

      +1

      Their front page headline link reads as Kevin reports it (this is as of 8:25am EDT Tuesday).

      The article itself upon opening is headed:

      White House Student Loan Forgiveness Could Cost About $400 Billion
      The estimate by the nonpartisan Congressional Budget Office gauged the cost over 30 years, though the bulk of the effects to the economy would be felt over the next decade.

      So, if you decide to click on the article, you're greeted with a pretty reasonable subheading sentence.

      I do think they ought to add "over 30 years" to the front page head, but overall, I agree with your take.

  8. Joseph Harbin

    Bush-Cheney claimed the Iraq War would cost $80 billion for the invasion plus $10 billion per year for 2 years. Before long it was costing $10+ billion per month, and total US cost has been calculated at $2 billion (or $3 billion, per Joseph Stiglitz).

    Wars get sold as cheap, yet are very expensive.
    Education is relatively cheap but we're told too expensive to afford.

    E.g., in California:

    Gov. Gavin Newsom vetoed legislation on Sunday that would have made the grade mandatory, citing the up-to-$268 million it would take to educate the estimated 5% of eligible students that don’t currently attend kindergarten.

    “With our state facing lower-than-expected revenues over the first few months of this fiscal year, it is important to remain disciplined when it comes to spending,” read Newsom’s veto letters for Assembly Bill 1973 and Senate Bill 70.

    $268 million is about 1/1000th the California budget ($234 billion). Rounding error. Assume the real reason is something else.

    1. Jasper_in_Boston

      I wouldn't assume it's "something else." While it may be the case that the kindergarten number provided seems a pittance in context, what are the surplus/deficit projections for California? I guarantee you Newsom's beginning to hear some dire predictions. California's state revenues tend to be extremely sensitive to the performance of financial markets—especially equities. It doesn't seem at all unreasonable to start be more careful with respect to spending, especially when it would appear 95% of California children already attend kindergarten.

      1. rick_jones

        Bbbut, the state took-in sooo much last year. Of course it will continue to do so no?

        It would be very interesting indeed to see how variable the take from the 1% or .1% if California happens to be.

  9. jvoe

    I submit comments to the Times on this idiocy all the time. They are rarely published. Now I address my letters to "Dear unpaid intern, If you ever get a job in the news industry, can you please do better?". These are never published.

    1. MontyTheClipArtMongoose

      Surprised Peter Baker, Maggie Haberman, Blake Hounshell, & Jonathan Martin havn't put out a hit on you, yet.

      Maybe they could hire a few of Stewart Oafkeeper or Gavin Mac Inness's goons to do it.

  10. lisagerlich

    The New York Times is not a right-wing publication. They (like all publications) want clicks. In any case, I prefer the scary headline. I think I am the only person on this blog who was taught that money doesn't grow on trees, and if it did, it would be worthless in the same way that leaves are useless to buy food.
    The best way to look at it is $400 billion (give or take) over ten years. That is 40 billion a year. The Covid blew up the deficit. So, let us say that we can get the debt back down to the 2019 deficit of one trillion (the cuatro comma club); it would be adding a tiny percentage that is true. But we are talking about a shortage of one trillion.
    The loan forgiveness is a giveaway to buy Democrats votes. It teaches youth that it is ok to get into debt irresponsibly and allows colleges with massive endowments to continue inflating their costs. An article on the Forbes advisor website states that "Between 1980 and 2020, the average price of tuition, fees, and room and board for an undergraduate degree increased 169%, according to a recent report from the Georgetown University Center on Education and the Workforce."
    Also, the Biden administration is treading on murky constitutional grounds, and our arguments about this program may be moot.
    But I cannot help myself and must link to this fun video:
    https://youtu.be/enTEvon9pbw

    1. ScentOfViolets

      Oh, grew up without running water and electricty, did you? If you didn't, STFU about 'being the only person here ...' yadda yadd.

  11. D_Ohrk_E1

    The student loan program will cost...
    money that could have otherwise been used for something else.

    That's the unspoken framing that is meant to be filled in by others. Just because Burr asked and got his CBO scoring back does not make the amount newsworthy. The policy choices were debated two years ago. The policy decision was made a month ago.

    By reporting an otherwise irrelevant data point, news outlets being used as political pawns.

  12. Vog46

    We hear a LOT about the $400B student debt forgiveness but nothing about this?

    The Coronavirus Aid, Relief, and Economic Security Act,[b][1] also known as the CARES Act,[2] is a $2.2 trillion economic stimulus bill passed by the 116th U.S. Congress and signed into law by President Donald Trump on March 27, 2020, in response to the economic fallout of the COVID disease.[3][4] The spending primarily includes $300 billion in one-time cash payments to individual people who submit a tax return in America (with most single adults receiving $1,200 and families with children receiving more[5]), $260 billion in increased unemployment benefits,********** the creation of the Paycheck Protection Program that provides forgivable loans to small businesses with an initial $350 billion in funding (later increased to $669 billion by subsequent legislation),********** $500 billion in loans for corporations, and $339.8 billion to state and local governments.[6]

    Last time I checked, $660B was a BIGGER number than $400B
    So, whats the issue here?

    PPP loan forgiveness is just starting too !!!

  13. kaleberg

    I thought they got rid of those penny jars - you know, have a penny, leave a penny, need a penny, take a penny - at cashiers because of COVID, but it was really because of a scare article that if this continues billions or years until the sun swallows the earth, then it would cost billions of dollars.

    1. MontyTheClipArtMongoose

      As Nancy Le Tourneau knows, American demifascism requires an ingroup protected but not bound by law, & an outgroup bound but not protected by law.

  14. Caramba

    The most important point of the NYT article is not the $400bn cost over 30 years but the moral hazard that it will create.
    Most of the cost will come from students that spend money for a formation that barely pay a living wage and certainly doesn't justify the college cost.
    This will not force prices down but perpetuate the high price instead of forcing an adjustment to fit the wages in the profession.
    At first I was ok with the new law, but in reality this will be a big costly failure.

  15. Special Newb

    In what universe is $400 billion not a big number? It may or may not be significant in a $20 trillion economy but that doesn't make it small.

    1. jvoe

      The economy is $23,000,000,000,000 per year as of 2021. The annual outlay for loan forgiveness is $40,000,000,000. So here's the math= $40,000,000,000/$23,000,000,000,000. Is it a small number?

    2. Vog46

      $400B loan forgiveness for ordinary students is welfare
      $669B in forgiveness of small BUSINESS loans is economic stimulation.

      Rhetoric is your friend............if used properly

  16. Gilgit

    I posted some stuff yesterday on Kevin’s last inflation post. I think I’ll cut and paste my crap from yesterday on this post also:

    Kevin’s main point has been that the Fed is wrong and they don’t need to keep raising interest rates to get inflation down because it has already peaked. I just saw a Youtube that talked about how the wholesale price of lumber is way down, but it will take a little longer for retail prices to start falling. The person also said the lumber mills are planning to start cutting back on production to keep prices high. Last week I watched a video on how shipping costs are continuing to fall. And, of course, that the shipping companies are planning to start scrapping many of their ships to make sure prices stay high.

    So yes, it is hard to tell exactly what inflation is doing, but Kevin keeps pointing out all the different indicators that show that prices have peaked. In response, people keep posting here that the year over year inflation rate is high. Yes, it is. Higher prices are working their way through the system and various prices will not go down right away or maybe even keep rising. The question Kevin is asking is how will higher interest rates magically keep that from happening. My opinion is that they won’t and the Fed doesn’t know what to do so it is raising interest rates. Basically they are panicking and think they should try and convince the world they know what they are doing when they do not.

    Part of me is wondering if they are taking the opportunity to raise rates back to “normal” levels and don’t actually think it will lower inflation. But they think rates near zero are bad so they want to raise them while they can.

    <>

    I doubt the Fed is looking at models. Kevin’s data is not secret. Using public data he has pointed out again and again that the normal inflation causing items simply are not there. That the inflation pressure is gone and things will slowly return to normal. But the Fed is wedded to the idea that every consumer in the country has seen high inflation for a year and if it goes on even a few months longer people will assume it will never end and then empty their bank accounts buying everything insight and Bam! We will be living in Zimbabwe. They could be raising rates by .25% and saying they are going to keep doing it until inflation comes down. Instead they are raising by .75% and causing a recession because they are ignoring the data and trying to convince people that inflation isn’t permanent even though most people have no skin in the future inflation game.

    As for ‘transitory’, I strongly think that if Putin hadn’t invaded Ukraine inflation would already be much lower. Additionally, although Krugman has backed off his inflation predictions, he earlier mentioned that from 1947-49 there was inflation that was at times higher than today. After WWII, everyone was cautious, but soon it became apparent the depression wasn’t coming back and started spending again. It took 2 years to convert factories to produce the high demand items and strengthen supply chains. The Fed didn’t raise rates, but the inflation subsided on its own. I suspect this is what is happening now with COVID. Factories had to be restarted and supply chains moved away from zero-Covid China - a process still not complete, but things are slowly being worked out.

    I’m amazed anyone thinks that the stimulus from a year and a half ago is affecting inflation today. In any case, the Fed is doing what it is doing not to “address inflation”, but to stop the perpetual inflation fairy from making people think inflation is here to say and cause them to panic buy. They are not doing the “task” they are assigned, but acting as a country wide psychologist.

    <>

    There. I posted my usual insane rantings while only putting in a few minutes of work. I suppose I’ll agree with the commenter that Kevin has the dates wrong and they started raising rates at a silly rate in March. However, I think the slowdown had more to do with the ridiculous asking prices more than anything else. I strongly suspect that if they had raised rates by .25% each time you would have had almost the same effect with little chance of a recession. The main thing was to make it clear that they would keep raising rates until housing slowed. Instead they are panicking.

    1. Gilgit

      Ha! If you post words inside greater than and less than characters it removes the words. The first greater than/less than is supposed to have these words in it:

      Then someone replied to me that Kevin had been wrong about inflation being “transitory” and the Fed is doing what it is doing because it is following its models

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