"The political system does not
reward budget cutters. There is too much to gain politically by
purchasing votes through promises of largess, while hiding or deferring
the costs, if they can’t be pushed onto to some unpopular group. I don’t
think this means Americans are a bunch of self-conscious freeloaders.
Rather they likely (and erroneously) see any benefits they collect as a
return on their forced tax “investment.” Social Security and Medicare
have certainly been misrepresented as such. Why wouldn’t people be upset
at the thought of reduced benefits?"
Peripatetics
Budget-Cutting Resistance
Sheldon Richman
July/August 2011 • Volume: 61 • Issue: 6 •
So here’s the problem: While polls show that people want the government’s
budget deficit and the national debt reduced, they don’t want the biggest
spending items cut.
In the April 17 ABC News-Washington Post poll, 59 percent said
that the deficit should be reduced through a combination of unspecified
spending cuts and tax increases. But 69 percent opposed cutting Medicaid,
78 percent opposed cutting Medicare, and 56 percent opposed cutting the
military. Fifty-three percent said they would oppose a plan to reduce the
debt significantly by “raising taxes on all Americans by a small
percentage and making small reductions in Medicare and Social Security
benefits.” Fifty-four percent said Medicare “should remain as it is
today.”
In other words, cut spending but stay away from where the money is.
Medicare, Medicaid (plus the State Children’s Health Insurance Program),
and the military represent nearly 40 percent of the budget. Social
Security is about 20 percent more. (Interest on the debt is 4.6
percent.)
In the poll 72 percent supported raising taxes on people making more than
$250,000 -- 54 percent “strongly.” There’s far more sympathy for raising
taxes than cutting spending -- not a good sign for libertarians.
A McClatchy-Marist poll had similar results. It found that a clear
majority, 64 percent, thinks the country is “going in the wrong
direction.” Of those who identified themselves as conservatives, 78
percent agreed. Moreover, 57 percent of all respondents said reducing the
deficit is the priority, with 68 percent of conservatives agreeing. No
other objective came close.
I point this out because in the same poll, when asked if Medicare and
Medicaid should be cut, 80 percent said no, with 68 percent of
conservatives agreeing. How about reducing military spending? Fifty-four
percent overall said no, including 72 percent of conservatives.
(“Liberals” and moderates approved, 60 and 54 percent,
respectively.)
Sixty-nine percent said they were against raising the debt ceiling, right
after saying that they would not cut the biggest items in the
budget.
I note for the record that of the conservative respondents, 48 percent
said they support or “strongly” support the Tea Party, while 44 percent
said they do not.
So what does all this mean? It seems to mean that despite the prominence
of the Tea Party and despite the fact that the word libertarian is spoken
in the news media more than ever before, the prospects for a major
reduction in the size of government in the immediate future are dim --
this at a time when there is also near-panic about the debt and the
deficit. If big cuts aren’t going to happen now, then when?
Sources of Resistance
The political system does not reward budget
cutters. There is too much to gain politically by purchasing votes
through promises of largess, while hiding or deferring the costs, if they
can’t be pushed onto to some unpopular group. I don’t think this means
Americans are a bunch of self-conscious freeloaders. Rather they likely
(and erroneously) see any benefits they collect as a return on their
forced tax “investment.” Social Security and Medicare have certainly been
misrepresented as such. Why wouldn’t people be upset at the thought of
reduced benefits? Even Medicaid, the medical program for low-income
people, affects the middle class. Medicare, the medical program for all
retirees, does not cover nursing-home care, but Medicaid does -- if a
person meets the means test. It’s an open secret that if a nursing-home
resident has too much money to qualify for Medicaid, the staff will
advise the family on what to do to become eligible. This usually involves
a lot of gift-giving and other activities to reduce the resident’s assets
to the acceptable level.
The upshot is that even middle-class younger people may well oppose cuts
in Medicaid if it means they will have to pay directly for nursing-home
care for an elderly parent or perhaps have him or her live in their
homes. This is part of a more general consideration. Most people already
on Social Security and Medicare would understandably oppose cuts in those
programs. Less obvious is that their grown children are likely to take
the same position, and not just because they expect to be beneficiaries
someday. If those programs were to end, or even be cut substantially, the
children would have to help pay their parents’ living expenses out of
their own pockets. Yes, they pay today through taxes, but there are
differences: First they don’t pay 100 percent, since other taxpayers also
kick in, and second there’s a bureaucracy between them and their parents.
I suspect most people would rather support their parents through the
government rather than directly, and most retired people would probably
prefer that too. Face-to-face dependence of aging parents on grown
children who are trying to raise their own families can be a source of
tension if not outright conflict.
Intervention Begets Intervention
Government interventions are not isolated
phenomena; rather they are part of a political-economic-social-cultural
system, with one part often intended to ameliorate the effects of some
other part. (Remember Ludwig von Mises’s “critique of interventionism.”)
Thus we should not discuss any particular part in a vacuumnot if we want
to say something constructive.
For example, it is an eminently libertarian prescription to call for the
abolition of Medicare on grounds that transferring wealth by force is
immoral. But left at that, the argument will persuade no one and might
even discredit the speaker. Why? Because it fails to acknowledge that
many current beneficiaries would be left in dire straits if the program
suddenly ended. Nor would it suffice to say that once the program was
gone, “the free market” would handle things satisfactorily. What free
market? American medicine consists of a
government-insurance-doctor-hospital protectionist cartel that suppresses
competition and innovation in the provision of services through licensing
and myriad other interventions. High prices and callous bureaucracies are
the rule for many people, and that didn’t begin with Obamacare. Surely
libertarians don’t wish to be understood as proposingin the name of
human freedomthat a vulnerable portion of the population be subjected to
that gauntlet.
None of this means that these programs are legitimate or should not be
abolished. They require force (taxes) and induce dependence on the
political class. What I’m suggesting is that libertarians need to bear
these considerations in mind when making their case against such
government intervention. They need to be cognizant of the wider issues
and combine their critique of Medicare with a critique of the entire
government-medical-insurance complex.
If we are to expand the sphere of freedom while shrinking the sphere of
force, we first need to be understood. We won’t be understood if we are
oblivious to people’s concerns and to how they currently see the
government’s role, however fallaciously, in addressing those
concerns.
http://www.thefreemanonline.org/columns/peripatetics/budget-cutting-resistance-2/
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