Dysfunctional Government? Dysfunctional Public, Too

If President Obama is despondent for being blamed across the political spectrum for everything that has gone wrong, he can take some consolation in what the public thinks of Congress. Two polls taken after the debt limit debacle show the approval rating for Congress at record lows – 10% in Fox News’ sampling and 14% in the CNN/Opinion Research survey. Who's to blame for that? A reminder: that's the Congress that we just elected.

But while Congress is certainly dysfunctional when it works at cross purposes – clamoring that there should be a vigorous jobs program while simultaneously cutting the spending that would be needed to make it happen – we should also take a look at ourselves.

In an early-August CNN poll, 57% of surveyed Americans believed there should be ”major cuts in spending on domestic government programs”. But 64% of those same respondents in that poll said there should be no “major changes to the Social Security and Medicare systems”, where spending is growing the fastest. Americans want a smaller government, but, like the fellow a couple of years ago at a town hall meeting in Simpsonville, S.C., who railed at his Congressman to ''keep your government hands off my Medicare'', we don’t connect that a smaller government means reduced government services. “The American public has wanted more government than it has been willing to pay for”, as an Economist article put it. The Pew Research Center’s finds that 60% of those they polled are for “keeping Social Security and Medicare benefits as they are”.

Both the CNN and the New York Times/CBS poll say 63% think the wealthy should pay more in taxes. There’s a seeming tendency among that group to think ending the Bush tax cuts for those earning over $250,000 a year is all that’s needed to cure the U.S. fiscal dilemma. In fact, restoring the top bracket from 35% to 39.5% would yield only $700 billion over 10 years. That’s real money, but hardly an answer to annual budgets that are running a deficit projected to be $1.65 trillion for 2012 alone.

Letting all the tax cuts expire is another matter. That would reduce the deficit by $3.8 trillion over the decade. But 87% in the CNN poll are against that. Let someone else pay.

Congress starving the government of revenue simply digs the hole deeper. Unemployment that hovers around 9% hides a much more serious fact. The percentage of working age tax payers has undergone a steady decline to less than 65% — already at low ebb before the 2008 crash sent the percentage plunging still further after a long decline from 60 years ago, when it peaked at almost 85% in 1953. The devastation of globalization has combined with the Bush cuts in income and capital gains taxes to reduce the revenue collected by the federal government to just 14.8% of our gross domestic product, the lowest in about 50 years, says the Wall Street Journal. Little wonder that the deficit is so high; it is not just from spending.

But few Americans know this, nor how much sacrifice would be needed to restore financial equilibrium. The question is how long it will take for the American public to learn the facts and Herb Stein's* law that "If something cannot go on forever, it will stop". Time to face up to our inevitably different future.

* Chairman of the Council of Economic Advisers under President Nixon and President Ford

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