When is a government benefit not a government benefit? Apparently, when you are on the receiving end of it. So says a recent column by Bruce Bartlett, former Treasury Secretary under George H. W. Bush, today in the Fiscal Times. In a stunning table that was also referenced by the Economix blog, it shows that majorities of people who enjoy the benefits of government programs do not understand that they are, in fact, government programs.
Of those people who said that they have not used a government social program, almost two-thirds enjoyed a 529 plan, three-fifths took advantage of the home interest mortgage deduction, and more than half used federally guaranteed student loans. Even more bizarrely, 44% of those on Social Security, 40% of those on Medicare, 28% of those on Medicaid, 27% of those on welfare, and over a quarter of those on food stamps also don’t believe they are using government programs. The first few examples are probably better described as government benefits instead of programs, but all the same, they are specific benefits created by the government available only to a certain subset of the population. Without the government, they would not exist.
If you were to add in federally guaranteed mortgages, I’d bet you’d see an incredibly high percentage who don’t realize that is also a government program. This is pretty important considering that the Obama administration wants to cut back on government support for mortgages. This would inevitably lead to more expensive mortgages, with the tradeoff of less taxpayer exposure to risks. How many people are aware of this tradeoff currently? How many people understand how the government helps the mortgage industry by keeping rates lower? Incidentally, I support the administration’s proposal, specifically the second option that essentially eliminates government support except in emergencies when credit markets freeze up.
Even though people don’t always understand when they receiving government benefits, by and large most people don’t want to cut them. A recent Pew poll shows that the only category of spending that a plurality of people support cutting is foreign aid. The only problem is that foreign aid makes up a miniscule fraction of the national budget. The big pieces: Medicare, Social Security, defense spending…they should be left alone for the most part, according to the people. At the same time, a large majority of people apparently oppose raising the debt ceiling, despite the catastrophic consequences.
What does all of this mean? Mainly that we are nowhere close to having a serious, national discussion on our budget priorities and how to pay for them. Most people have no idea what the government pays for or what government benefits they enjoy. Most people have no conception of how the budget works, or how our national debt works. Combine that with a powerful Tea Party contingent in Congress, and who knows what will happen. Government shutdown? U.S. default? It’s all coming to a head.
As the old saying goes, any road will get you there when you don’t know where you are going. The U.S. public wants to travel on the road of government benefits at no cost. That road is approaching a dead end. The question is, do we turn around or run off a cliff?