The current conflict over government spending illustrates the new dangers of ignorance. Every economist knows how to deal with the debt: cost-saving reforms to big-ticket entitlement programs; cuts to our bloated defense budget; and (if growth remains slow) tax reforms designed to refill our depleted revenue coffers. But poll after poll shows that voters have no clue what the budget actually looks like. A 2010 World Public Opinion survey found that Americans want to tackle deficits by cutting foreign aid from what they believe is the current level (27 percent of the budget) to a more prudent 13 percent. The real number is under 1 percent. A Jan. 25 CNN poll, meanwhile, discovered that even though 71 percent of voters want smaller government, vast majorities oppose cuts to Medicare (81 percent), Social Security (78 percent), and Medicaid (70 percent). Instead, they prefer to slash waste—a category that, in their fantasy world, seems to include 50 percent of spending, according to a 2009 Gallup poll.
This harkens back to Atrios commenting yesterday that we don't hear from the many economists who know this is hackery. It's certainly not the case, as Andrew Romano conceded to me on the twitter yesterday, that "every economist knows" cuts to social programs are essential. He tweeted, instead, that he should have referred to "the vast majority" of economists. I also rather doubt that's true, but he certainly couldn't be bothered to cite a few examples.
That people oppose cuts to the social insurance safety net seems pretty sensible. Social Security is fully funded, prepaid out as far as projections can reasonably go. Medicare is not itself the problem; the fact Americans in every part of the healthcare sector pay twice as much as the rest of the OECD for worse results (higher mortality, higher morbidity) is the problem. And, in our system, Medicaid is the insurer of last resort--after you've gone through personal bankruptcy. So you really want to keep that around if you aren't in the top income decile.
I suspect many people view troops in Europe, Asia, and the Middle East as falling into the "foreign aid" category, not the defense category. That'd be an interesting question for Markos to poll someday. As for waste, they've been hearing that canard reported ceaselessly, so it's not surprising they are misinformed.
What is striking, though, is Romano's rejection of democracy as an important input to his policy recommendations. The requirement to cut social insurance programs, converting them from middle class programs to welfare, is reported as an inevitable consensus among all the cognoscenti--call them what you will: "the elites" "the Villagers" "the Third Way" or "the New Democrats. That inevitable consensus dominates the Beltway narrative right now. In fact, as the current Gang of X gathers behind closed doors to "courageously" make lives worse for ordinary Americans, it seems to be the only narrative. It's also striking that Romano doesn't even bother to state what policy goal these program cuts achieve; the evil deficit now lurks, unspoken, in the narrative framework.
They've never made a case for this policy regime, but nonetheless "everyone knows" something must be done.