The Futility of Budget Cuts
Thursday, April 08, 2010 at 12:52 pm
Today, an Economist/YouGov poll making the rounds shows that Americans would vastly prefer budget cuts to new taxes — by 62 percent to 5 percent. The poll goes on to ask Americans which government spending programs they would choose to cut: “If government spending is reduced in order to balance the budget, which of the following government programs should receive lower federal funding than they currently do?” (Respondents could pick more than one thing to axe.)
Here is how they responded:
The most expendable programs, according to poll takers, were mass transit, housing, agriculture, environment and foreign aid, the runaway winner at 71 percent. The problem? These programs together barely comprise 3 percent of the federal budget. Even if the programs were entirely eliminated, the cuts would do nothing to solve the United States’ long-term entitlement program. Indeed, the responses had no obvious correlation with spending size.
The red bars in this graph indicate expenditures in the various areas:
The poll highlights the conundrum: Americans want to solve the long-term deficit program and want the federal government to run a balanced budget. They are willing to make budget cuts. But the government cannot cut enough from discretionary programs to bring the budget into check and ultimately to reduce the deficit. (Half of Americans still believe the government can.) Entitlement programs — Medicaid, Medicare, and Social Security — are at the heart of the problem, with spending growth in health care programs the single biggest culprit. The lone solution — save for politically improbable radical spending cuts to defense, health care programs and social security — is tax hikes. Most economists agree on the point, reiterated strongly by Fed Chair Ben Bernanke in a speech yesterday. But the promise of tax increases is hardly a savvy campaign platform, and it will be up to members of Congress to sell the necessity and prudence of tax hikes to an economically distressed citizenry.
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