1. People mean the actual federal budget deficit, but are misinformed (Krugman/Drum).
2. People mean the federal debt, not the budget deficit, and correctly believe that the debt is still rising (suggested by Megan McArdle today and by several of us after Eric Cantor said the deficit was going up recently; this was if I recall correctly a big Mario Cuomo talking point in the 1980s -- if only Democrats would say "debt" instead of "deficit," they would win all the elections, or something like that).
3. People mean "economic bad times," not the federal budget deficit. Recall the voter who asked George H.W. Bush, Bill Clinton, and some kook who security had accidentally let on stage during a presidential debate about how the
4. People mean "stuff I don't like in the budget," not the federal budget deficit. Goes with what I call the GOP war on budgeting -- for example, if that's what you mean by "deficit," then of course the ACA increases the deficit regardless of what CBO says.
I'm confident that it's roughly split between explanations 4 and 3, but I don't really have any hard evidence for it, and all of them are plausible. I've asked before, but: Hey, pollsters! Help us out here! I'm not really sure how to go about testing this one...surely not simply posing these four possibilities. But it sure would be nice to have an idea about what people actually mean when they talk about the deficit.
*Corrected. I remembered this wrong; thanks to Drezner for the catch. Don't think it changes the point, though.
Sake of argument, suppose there are two general narratives on the debt/deficit (the first has two parts): 1a) The Cheney Deficits don't matter. 1b) The Keynes/(Orwell?) More deficit now = less deficit later. 2) The Jimmy McMillan The debt is too damn high!
ReplyDeleteWe infer from Krugman's column that the folks in the 2nd category are simply not paying attention, otherwise they would understand that
the deficit has been falling like a stone,
which circumstance, as Krugman presents it, is a proxy for the following: the debt, and the deficits that feed it, are fixing themselves and nothing to worry about.
As we recall from the Cantor discussion, however, the deficit is really only falling like a skipping stone, with 2015 - the year where Krugman's graph ends - the equivalent of the water, off which the deficit will bounce and shoot up once again.
From which we gather that the people are confused, alright, which is the perfect time to proselytize them.
Lovely comment, especially the part on the graph conveniently ending at 2015, and the image of the stone skipping off the water. Can economics explain how a stone skips? Is there an economic equivalent to that phenomenon?
DeleteEh, that sort of thing is way beyond my pay grade, I defer to the spirit of Jeff's comment the other day (on genetics) about leaving the expert stuff to the experts...
Delete...as always, I'm pretty much just throwing stuff out there, hoping it bounces off the water...
It would be interesting to know how well past projections have predicted deficits three or more years into the future. My guess is "not very well."
DeleteThe anticipated post-2015 bounce is now lower than it used to be, but, CSH, you're misinterpreting Krugman. He doesn't say the debts and deficits are fixing themselves and therefore there is nothing to worry about. He says that the deficit is going down too fast, and that is what he worries about. He also worries about people who want to make it go down faster.
DeleteScott, I agree that Krugman doesn't say that the deficit is "fixing itself". What I meant by the verbiage "...as Krugman presents it..." is that a reader might be forgiven for thinking that the deficit was fixing itself, based on a graph that conveniently terminates in 2015.
DeleteI think JHB in general underrates how much the general public understands this stuff. Everyone knows what the word "deficit" means. They may use it interchangeably with "debt," which I think isn't really that big a deal. But they don't think "deficit" means "bad times," at least not directly. The problem is, people are told constantly that deficits are crushing our economy, so although they don't think of the two as the same thing, they think one inexorably leads to the other.
ReplyDeleteI think you're correct about most people's understanding.
DeleteBut there's also the problem that tons of polls, when they ask what politicians' priorities should be, just say stuff like healthcare, education, terrorism, the deficit. They tend to not include an option like "improve the economy" or "reduce unemployment" or "increase wages", which is what most people actually care about most. So respondents choose "reduce the deficit" as a proxy for those. Thus these polls show tons of people focused on balanced budgets when in fact they just want the economy to get better and probably don't care how.
The deficit actually is very important to the economy, but in the exact opposite way of what people think. If we could ever get the public to understand that budget deficits increase demand and thus usually improve the economy (and almost always increase growth, employment, and wages) then we'd be in heaven. But at this point I'd settle for everyone just shutting up about deficits and saying unemployment instead.
TN -- you could be right; that's what I want to know!
DeleteI'll readily admit that I'm guessing when I say I think it's mostly #3 and #4. Informed guessing, but guessing.
JB,
ReplyDeleteShouldn't you be linking somewhere in this to the HuffingPo poll (inspired by you, no less!) on the subject of what "waste" is?
http://www.huffingtonpost.com/2013/03/18/wasteful-spending-poll_n_2886081.html
Nothing says HuffingPo can't go and commission another poll......
Good point.
DeleteI think this one is a lot harder to design questions for.
From Delli Carpini & Keeter (page 308):
Delete"what is the federal budget deficit, or don't you know enough about it to say?" In 1985, 54% "knew" and 52% in 1987.
I can't tell from the text (and can't seem to find these questions very well on Roper, myself) whether these were open-ended questions or what. They did have a prompt:
"As you may know, there are many different complicated terms use in news stories to describe the economy and the stock market. Many people understand these terms but many people do not.." (There's more, but you get the picture: there's then a preface for "here comes a list, do you know what X is?"
Anyway, this is about the same number as things like "what does filibuster mean?" and "how many US senators are there from your state?" and "what is meant when someone is called a conservative in politics?"
Another question on page 308 is: "here is a list of three statements. Which comes closest to your understanding of the definitions of the federal deficit?" (52% right in 1959 and 44% right in 1960)
I think it's safe to say that a bare majority of Americans has any idea what a deficit is. I think we could safely assume a ceiling of 60% (to allow for error and what-have you) for #1.
However, don't forget the research (why am I blanking on who did it? Bartels?) showing that perceptions of the deficit and, really, ANYTHING are totally colored by partisanship.
ReplyDeletePerceptions of the deficit getting worse could be linked to falling presidential approval......
Matt,
DeleteIf you happen to remember who did this work, would you mind dropping it here? I'd be quite interested.
Damnit! Why can't I remember this one?
DeleteSorry...I'm struggling to find it. I remember the findings: Republicans in 1996 thought the deficit had gotten worse under Clinton, PARTICULARLY if they were "better informed!" (which wasn't self-identified, but rather measured by knowing political facts). Of course, the deficit had gotten better. (Democrats did the same thing with inflation under Reagan, and again the effect is really only amongst the "better" informed)
The source for this? Damn. I hate not being able to remember this. I want to say it's a Bartels piece. But, THIS one (http://www.uvm.edu/~dguber/POLS234/articles/bartels.pdf) talks about the misinformation, but it doesn't have the informed comparison I'm mentioning. So, my best guess is that that I took away the informed thing from ANOTHER source that was heavily referencing that Bartels piece!
Sorry I can't be more helpful. I mean, this shows that Dems thought inflation got worse under Reagan (it didn't) and Reps thought the deficit got worse under Clinton (it didn't), but it doesn't have the info component to it, which is, to me, the most interesting part of it.
We actually do have actual polling on what people know about the budget and the deficit in particular:
ReplyDeletehttp://www.bloomberg.com/news/2013-02-22/americans-back-spending-cut-delay-amid-budget-deal-push.html
> At the same time, the size and trajectory of the U.S. deficit is poorly understood by most Americans, with 62 percent saying it’s getting bigger, 28 percent saying it’s staying about the same this year, and just 6 percent saying it’s shrinking.
No (and I don't see a link to full questions, and I couldn't find it in a very brief look around), that just tells us that people are wrong about the size. Doesn't say anything about what it is that they think is expanding or contracting.
DeleteThey should poll Congress on this question. Watching members of the CBC talk about the economy while in committee is hair-raising. Terror and night sweats for all!
ReplyDeleteI think they should also poll pols for definitions of leverage, speculation, you name it. I just watched some Barney Frank and found myself shaking my head. It's supposedly the job of these people to know stuff and legislate intelligently.