Benjamin Studebaker

I’m back in the United States for a month, so it’s only fitting to write an American piece. There’s a statistic out there that should put fear into the hearts of those of us who practise, either professionally or as a hobby, the art of statecraft. The implications of this statistic are vast for the health of the American economy and the American democracy.

Apparently when asked the question “Were the United States to “go over the fiscal cliff,” what do you expect would happen to the National Deficit?”, by Business Insider, the answers were as follows:

This is not an opinion question. It is well-documented by the CBO and by this blog among countless others that going over the fiscal cliff means a large decrease in the deficit (the problem caused by the fiscal cliff is one of economic demand–it will take lots of money out of the economy and likely send the US back into recession). This is a fact, about which there can be no doubt within the bounds of reasonable scepticism. You either get this question right, or you get it wrong. The right answer, is, of course “It will decrease”. 87.4% of those surveyed got the question wrong.

This means that 87.4% of people do not even know what the problem of the fiscal cliff is to begin with. We have no way of knowing what percentage of the remaining 12.6% actually have good ideas about what should be done about it, but there’s reason to believe there’s a large portion who do not. What reason have I to make such a claim? Let me introduce you to the Republican Party’s plan to circumnavigate the fiscal cliff with a little help from Bloomberg and the NYT:

The republicans claim they want to cut $900 billion from mandatory spending and $300 billion from discretionary, but have the left the overwhelming majority of these figures unaccounted for with any specifics but appeals to unspecified “base broadening”, just like the Ryan budget did. The only specific proposals the republicans have offered are, from Mitch McConell, plans to raise the Medicare retirement age, raise premiums on higher-earning Medicare users, and reducing the rate that Social Security benefit increases so that it can keep up with inflation. These proposals have a total deficit-reduction value of around $300 billion and impose vastly greater hardship compared with Obama’s alternative, which reduces the deficit by $1.6 trillion by raising taxes on the wealthy. The republican plan is in short:

1. Not a real plan–it does not account with policy proposals for most of the money it claims it will save.
2. A cruel plan–it imposes quite a bit of suffering via raising the Medicare eligibility age and reducing Social Security benefit at very little comparative financial saving to the tax hike they vehemently oppose.

This establishes that a large chunk of the 12.6% who are aware of what the fiscal cliff does have no intention of doing anything sensible about, but the democrats can also come under scrutiny just for buying into the premise that the economy needs to see deficit reduction right now as opposed to growth policies to reduce unemployment, which is still nearly 8% at the time of writing. I have made the “debt crisis is an illusion” argument previously and will not digress on the subject too thoroughly today–you can read my most recent iteration of that point over here.

The long and short of all of this is that the number of people who are aware of what the problem is–12.6%–still massively over-represents the number of people who have any inkling of what should be done about the problem, and that’s true whether you agree with my argument about this being the wrong time to focus on debt and deficits or not. If you’re a republican, the democrats still have it wrong, and vice versa, meaning that the number that has it right can be no greater than around 6.3%–and less than that, if you’re with me in the “get the unemployment rate down first” camp.

This means that if we actually held a nationwide vote on this issue, the chances of the right argument winning are quite low, unless the winning argument is combined with exceptionally good propaganda. Let us remember that even though we are not going to be holding a nationwide vote on the fiscal cliff, we did just hold a vote in November that determined who would get to vote on the fiscal cliff. If the transitive property of equality in mathematics has any value here, if ignorance chooses congress and congress chooses policy, then it stand to reason that ignorance chooses policy. Or perhaps we ought to consider ourselves lucky in the first place that the people in congress are at least in the 12.6% that are aware of what the fiscal cliff is, and forgive at least half of them for being completely clueless about how to resolve it?

I don’t blame the 87.4%. The economy is a complicated beast, and most people have better things to do with their time than study it, like go to work and make said economy function in the first place. A nation of economists goes naked and ill-fed to a speedy demise. My grievance here is with the political system that requires that so many people have some working knowledge of the complicated and the specialised. It is an unrealistic expectation that demands ideal knowledge from real people, and people rarely conform to anyone’s ideal. Our political system, not unlike communism, fails to account for the human failings that are a natural part of life. It sounds quite good in theory, but in practise…

In practise it leads to selection of policy on the basis of ignorance, and consequently the implementation of bad policy. Whatever result this fiscal cliff crisis produces, it is likely to be quite bad, or, at the very least, quite a bit worse than it should be or needs to be. For that we have our imperfect nature and out unwillingness to compensate for it politically to blame.