"I subjected myself to this pain
because I’m a professional masochist. I’m paid to do it. How many people
who are not so rewarded are likely to search for, locate, and download
CBO spreadsheets to see the numbers for themselves? Very few, I’ll bet.
And who can blame those who won’t? They have families, friends,
communities, and jobs to attend to -- matters they actually affect
through their actions. But if most people don’t have time or incentive to
learn the facts about this one issue (never mind all the others) -- and
if the news media can’t be counted on to tell the plain story -- how can
Americans fill the role of “informed voters” that democracy in theory
requires?"
TGIF:
Sequestration and the Chimera of
the Informed Voter
by
Sheldon Richman
March 1, 2013
I spent too much time and effort this week trying to figure out the
budget implications of sequestration. This made me wonder how many, well,
normal people would be willing to do that. If the answer is “not many,”
then in what sense can we talk about the “informed voter”? And if the
“informed voter” is a chimera, how can we expect democracy to yield
desirable outcomes?
Let’s start at the beginning. Anyone who relies on the news media to
learn the implications of sequestration is probably confused and most
likely misinformed. With few exceptions, the media lead us to believe
that today’s automatic “cuts,” mostly in federal “discretionary” spending
(that is, spending on things other than Social Security, Medicare, and
Medicaid, which Congress has on autopilot), will be catastrophic for the
economy. Why? Because, like good Keynesians, they believe that the
economy now suffers from inadequate consumer demand, and that lowering
government spending would decrease demand even more. For example, if
government workers lose their jobs, they can’t buy things, and if
military contracts are cancelled, the contractors’ employees will have
less income to spend. This would lead to more layoffs. Government itself
is a big consumer of goods and services, so less spending means less
consumption, with a rippling effect throughout the economy.
Hence, sequestration is said to threaten a new recession when we really
aren’t out of the last one. (Never mind that consumer spending has
recovered from the recession, and that the money which government leaves
in the private economy will be spent or invested, which constitutes
someone else’s spending.)
If you can find a commentator who is skeptical about this bleak
prediction, chances are he or she believes that the Pentagon side of
sequestration will, as former Secretary of War Defense Leon Panetta put
it, “hollow out” the military. (Untrue, though the military could use
some hollowing out. See this graphic.) Among conservatives, we find a
large number of military Keynesians, who believe that Pentagon spending
is a twofer: it protects the country while buoying the economy by
creating jobs making war materiel. Even some self-styled progressives
claim this. Democratic Rep. James Clyburn of South Carolina, who probably
thinks of himself as a dove, protests Pentagon spending reductions
because they would eliminate contractor jobs in his congressional
district. (His political self-interest is too obvious to require
comment.) And the New York Times refers to the “deep automatic
spending cuts that will strike hard at the military.” Again, not true. At
any rate, U.S. foreign and military policy endangers Americans,
and people making war materiel could be making consumer goods that
improve our lives.
While most commentators and reporters talk about “draconian” budget cuts,
occasionally someone points out that these are not true cuts, but only
reductions in the rate of increase. Washington uses baseline budgeting,
which builds in spending increases for future years. In Washington
bureaucratese, reducing a projected increase is a “cut.”
So, what is the truth? After some time-consuming, eye-straining, and
head-aching concentration, with help from Cato Institute budget analyst
Tad DeHaven, I learned that with sequestration, total federal
outlays in FY13 would still be $15 billion higher than FY12.
Higher, not lower. But, admittedly, that’s misleading, because the
sequester applies mostly to discretionary spending. According to recent
figures from the Congressional Budget Office, which assumed that the
sequestration cuts would go through, discretionary spending actually
would be $72 billion lower than last year. Mandatory spending,
however, would increase by $85 billion over last year. Include interest
on the federal debt and you arrive at the overall $15 billion increase in
federal spending. (To download the CBO’s spreadsheet, click
here.)
But that’s not the end of the story.
When the media and politicians refer to $85 billion in cuts, they are
referring to funding (“budget authority”) not actual spending
(“outlays”), an important difference. DeHaven writes, “According to the
Congressional Budget Office, the $85 billion in sequestration spending
cuts translates into [a] $44 billion reduction in actual federal outlays
for 2013.” Of that, $35 billion comes out of discretionary spending
just 2.7 percent off last year’s level. (The rest comes out of
mandatory spending, mostly Medicare. This chart, compliments of DeHaven,
puts things in perspective, as does this one and this one.) Establishment
economist Jeffrey Sachs acknowledges that with sequestration, this year’s
discretionary spending would be a larger percentage of GDP than
President Obama projected in 2009. This is draconian?
If a 2.7 percent cut in discretionary spending endangers our economy and
security, something is wrong. As I’ve
said before, progressives scoff at the claim that our society is too
dependent on government, yet they issue dire warnings about a less than 3
percent cut in discretionary spending after a decade during which the
federal budget doubled and the debt skyrocketed. They can’t have it both
ways. Are we really to believe that government agencies can’t cut 2.7
percent from their budgets? (Of course, the agencies should be
abolished.)
Are your eyes glazed over by now? That goes to my deeper point. I had to
exert some effort (with much help) to learn the facts. If you were to
casually search the web for the information, you would likely come up
with inaccurate information. For example, Wikipedia says expenditures of
nearly $3.8 trillion were enacted in FY12. But the latest CBO spreadsheet
says $3.5 trillion. Why the difference? Wikipedia is not up to date.
Different government agencies issue different estimates of spending at
different times during the budget year. You have to make sure you’re
using the latest numbers.
I subjected myself to this pain because I’m a professional masochist. I’m
paid to do it. How many people who are not so rewarded are likely to
search for, locate, and download CBO spreadsheets to see the numbers for
themselves? Very few, I’ll bet. And who can blame those who won’t? They
have families, friends, communities, and jobs to attend to -- matters
they actually affect through their actions. But if most people don’t have
time or incentive to learn the facts about this one issue (never mind all
the others) -- and if the news media can’t be counted on to tell the
plain story -- how can Americans fill the role of “informed voters” that
democracy in theory requires?
Next year there will be congressional elections. If a voter doesn’t know
the facts about the budget, she won’t be able to judge the sequestration
issue. And if she can’t do that, how can she intelligently decide which
congressional candidate to vote for?
Most people would say that voting for Congress is important, so why don’t
they spend time doing this necessary research? Because they know that the
effort would have no real payoff. Time is scarce, and there are always
other uses of one’s time that really will make a difference. The average
congressional district has 600,000 residents, three-quarters of whom are
of voting age. No single vote will determine who gets elected or what
policies are enacted that is, no matter what you do, the outcome
will be the same. And should your favorite candidate win and enact
his program, you would pay only a tiny fraction of the total cost of that
candidate’s policies; most of the cost would fall on others. So why exert
much effort?
Thus, it’s costless to vote for the candidate who makes you feel good
about yourself. As Bryan Caplan has shown, given these incentives, people
tend to vote according to their biases, which for most people embody
economic fallacies.
Yet the keepers of the system (pundits included) play a game in which
they pretend that voters are informed and make wise decisions.
Common rhapsodizing about democracy notwithstanding, the details of what
Leviathan does are beyond comprehension. (Remember, members of Congress
don’t read the bills.) Even an enthusiast for big government can’t tell
if this government’s policies do good or harm. Yet the cult of
democracy aims at maximum participation in elections. If a small number
of ignorant voters is not good, how can a larger number be an
improvement?
Here’s a better idea: let people cooperate with one another in the free
market, and leave as few matters as possible to the overrated democratic
arena.
http://fff.org/explore-freedom/article/tgif-sequestration-and-the-chimera-of-the-informed-voter/
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