Monday, February 14, 2011

Actually, It's Self Interest

A lot has been made of the schizophrenic nature of people wanting deficit reduction but not actually wanting to cut any meaningful spending and not wanting to raise taxes. Krugman piles on. I've got two gripes with this.

While it is certainly true that people in general do not understand where tax dollars come from or go, the results of the polling don't really indicate that. They indicate that people are, by and large, very self interested. I don't want my taxes going up. I don't want the government spending lots of money on things I don't like, but I do want the government to spend lots of money on things I do like. That's about all the polls really say about the general public.

Second: deficit reduction requires one think about both taxes and spending, and it requires long term thinking, not just next year. As such it is possible that one needs to add up all the pro deficit reduction position percentages, not look at where majorities for each lie. i.e. if 25% believe in tax increases and 25% believe in serious spending cuts and 15% believe in serious long-term curve bending legislation that really is not exactly the same as spending cuts, then you could have 65% of the population serious about the budget deficit, but no simple majorities anywhere.

I don't think we really sit quite like that, but I wouldn't be remotely surprised to find that a large majority who favor more/higher taxes also want more spending, and vice versa. In the end I think it is mostly point one. Deficit/taxes/spending/growth is a complicated mix and even well learned people disagree about what to do. As such, the sensible position for random person A to take would be positions that most benefit person A, namely: lower taxes for person A, more spending on things beneficial to person A, and less spending on things not beneficial to person A. Altruism/Patriotism may factor in to some extent as well (see military spending) but mostly it's self interest.

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