Thursday, July 14, 2011

Ambient Stupidity Alert: Opinion Polling about the Federal Budget Deficit

There is crazy-making economic noise all around us, and one way to grope our way back to sanity is to recognize it, bottle it, and stuff it into an Ambient Stupidity Alert.

My contribution today is to make yesterday’s Five Thirty Eight column in the New York Times disappear, cognitively at least.

Nate Silver, who really knows his polling numbers, processes a recent Gallup poll on policies to reduce the federal budget deficit. Here’s the question Gallup asked:

Now let’s try to cut through the noise. Why should a rational person have a preference for how to cut the budget deficit before deciding whether to cut the deficit? As the most recent employment and job vacancies numbers make clear, the economy is treading water at best, and, as the last remaining stimulus funds are spent, budget policy at both state and federal levels is dangerously procyclical. On top of that, our trade deficit just bumped up to an annualized rate of $600B, and that means that, between them, households, firms and the federal government will have to borrow more if that trend continues. The external deficit is identically and simultaneously a flow of borrowing, and the only question is who goes into hock. How about a poll question about that?

But it gets worse. Gallup asks abstractly about “spending cuts” and “tax increases”, as if it were rational to have monolithic preferences about these wildly heterogeneous categories. If I wanted to cut the budget deficit, the very first thing I would do is put a quick end to counterproductive wars and provocative military spending projects. The last thing I would do is cut the social safety net when un- and underemployment are wreaking havoc. I would certainly favor increased taxes on above-median earners (which includes me incidentally), but I would be against raising them for those in the bottom slice. So how am I supposed to answer Gallup’s brain-dead questions?

Here’s a hypothesis: When the Gallup interviewer asks what people think about “tax increases”, most of them translate that into “tax increases on me”, and they don’t like them. What if you asked them about tax increases only on those at the top of the heap, whose income is well above most of the respondents? I’m not saying that soak-the-rich would push aside all the other choices, but it would fare better than soak-yourself.

And another: What if, instead of asking about “spending cuts”, Gallup gave people a short list of spending categories, how much is in each of them, and ask, how much would you want to cut from them? Don’t ask if people want to cut “foreign aid” with no clue about how much money is at stake—show them the money, alongside the amounts in the other categories, and let them make at least a potentially reasoned choice.

Reading this column was like getting sucked into an alternate universe, where pod people with blank expressions mumble strange things about economics. Wake up, before you become one of them.

3 comments:

wellbasically said...

Amen

Ben Leet said...

Do you have a code system for Ambient Stupidity Levels, lavender, green, orange, red? It may be a new debating technique, pull out a colored handkerchief from your pocket to indicate ambience change in the debate.

TheTrucker said...

It will _ALWAYS_ get back to the same thing. WE MUST TEACH MACRO ECONOMICS IN HIGH SCHOOL. That's right, my brilliant model rendering calculus ninnies. You can take the calculus and stick it where the sun don't shine, because the voters are not going to learn it. Most voters do not attend universities and all the "college prep" crap is a waste of time and money and as well as a waste of opportunity to teach the basic concepts of political economy to the voters. Division and specialization of land and labor along with real capital development can be well understood with simple algebra and perhaps just basic arithmetic.