Tax Cuts and Spend: Are Americans Irrational About Government Money?

This week, The Economist asked a bunch of Americans whether we should tackle the federal deficit by raising taxes or cutting spending. Not surprisingly, 62 percent wanted to cut spending. Only 5 percent wanted to raise taxes. Then they were asked where those spending cuts should happen. The answer: nowhere. See the chart. There was no category of spending that more than a third of Americans thought should be cut. (The one exception, "foreign aid," accounts for 1 percent of total spending.)

Kevin Drum waxes cynical:

Beyond [foreign aid], there were only four areas that even a quarter of the population was willing to cut: mass transit, agriculture, housing, and the environment. At a rough guess, these areas account for about 3% of the federal budget. You could slash their budgets by a third and still barely make a dent in federal spending. I suppose one of these days everyone's going to have to figure this out. Apparently no time soon, though.

Drum's interpretation—that America, as a whole, just fails to grasp basic tradeoffs—seems a little harsh to me. Just check out this poll: People think about half the money government spends is wasted. And whether or not that perception is totally accurate, we're all outraged by $600 toilet seats and overcharging by Halliburton, right?

In answering the first question The Economist asked, people may have felt there is a huge opportunity to reduce spending through greater efficiency without paring down programs. But with the way the second question is asked, there isn't an easy way for one to express the opinion that all of these programs are important, and money should be saved through smarter spending, rather than deprioritizing any of them.

There's certainly a cake-and-eat-it-too attitude in America, but I don't think this poll is the easy evidence for Americans' irrationality that Drum takes it for.

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