Americans Fail to Understand the Federal Budget

Last week I posted a poll which showed, in my opinion, that Americans don’t understand low taxes and high benefits with a national debt of $14 trillion was a contradiction that can’t continue to co-exist. Well, yesterday Glenn Kessler at the Washington Post did some fact checking on Americans’ understanding of the federal budget:

Yet another depressing survey was released this week that attests to the failure of most Americans to understand the basics of the federal budget — and why there is a soaring budget deficit. Respected Republican pollsters Ed Goeas and Nicholas Thompson reported that 63 percent of those surveyed believe the federal government spends more on defense and foreign aid than it does on Medicare and Social Security. (That’s wrong.)

A similar majority believes that problems with the federal budget can be fixed by just eliminating “waste, fraud and abuse” — and that 42 percent of every federal dollar is wasted. “Voters do not casually agree with these untruths — at least 40 percent strongly agree,” the pollsters said.

This survey is broadly reflected by other polls, recently collected by analyst Bruce Bartlett. Among the gems he uncovered:

A Nov. 30 poll by WorldPublicOpinion.org found that, when people were asked what percentage of the federal budget goes to foreign aid, the average response was 27 percent. (The real number is about 1 percent.) The estimates were essentially the same for Democrats, Republicans and independents.

A Jan. 26 Gallup poll found 59 percent of people favor cuts to foreign aid, but a majority oppose cutting any other programs, including Social Security, Medicare and education.

A Jan. 12 Ipsos/Reuters poll found that 75 percent of people say foreign aid should be cut, but the only other programs that a majority of people favor cutting are the budgets of the Internal Revenue Service and the Securities and Exchange Commission.

The truth, as Mr. Kessler points out, is very much what has been posted here at OB&B and, in particular, the book The Coming Generational Storm:

To some extent, politicians are to blame for some of the public confusion. The debate in recent weeks has focused on cuts in the discretionary part of the budget — which is only about one-third of the government’s $3.7 trillion budget — and the tiny sliver of spending on foreign aid was a big part of that debate. For his part, President Obama, in his 2012 budget, highlighted cuts to relatively minor programs and avoided making proposals for reining in the cost of the big-ticket spending programs.

Look again at the chart. Much of the budget — more than 40 percent — is spent on social insurance, such as Social Security, Medicare and Medicaid. The interactive graphic shows that spending in those programs have soared in the last 30 years (while foreign aid has essentially stayed flat). Projections show the spending in those programs will only increase, especially as more of the baby boom generation heads into retirement.

That’s where the money is. Politicians should be honest about the real sacrifices that will be needed, by all Americans, to deal with the looming sacrifices necessary to bring down budget deficits. Cutting development aid in Africa really will not make much of a difference.

Interestingly, a recent study by the University of Maryland found that when people were actually given the facts about the budget, they could seriously understand and make choices about how to deal with the deficit.

In fact, the results upended some of the usual media stereotypes, with Democrats cutting spending more than Republicans — and members of both parties agreeing to raise taxes. (Even after the survey, though, the respondents continued to have a misperception of foreign aid, with the median response being that it was about 15 percent of the budget and that it should be about 5 percent — still much larger than the actual percentage).

Mr. Kessler is being too kind, and that’s understandable considering he needs to retain access to the very politicians who are generating the confusion about the budget and the national debt. Politicians on both sides of the aisle have been desperate to avoid confronting the true scope of America’s budget woes, so instead they foster this confusion in an attempt to maintain the public’s ignorance of the fiscal malfeasance occurring in Washington D.C. But, obviously, the truth can’t be kept hidden forever – especially if the Washington Post continues to report it. Tax increases and benefit cuts are sadly inevitable. Politicians who tell you otherwise should not be trusted.

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