The Vicious Cycle of Fiscal Incoherence

The Vicious Cycle of Fiscal Incoherence

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As recent developments illustrate, we are in a vicious cycle of fiscal incoherence: our leaders speak cynically, if not dishonestly, about our fiscal problem, fueling public ignorance that presents more opportunity for our leaders to speak cynically and dishonestly, fueling even more public ignorance.

Such ignorance can only impede efforts to convince Americans, in the near future, to accept the bitter medicine of deficit reduction in order to reduce the risk of fiscal calamity and strengthen the economy for the long term.

On Monday, we learned from the latest “Congressional Connection Poll” (a joint project of the Pew Research Center and National Journal) that 66 percent of Americans believe last year’s stimulus bill increased the federal deficit. Duh! Of course it did. It was supposed to do so in the interest of reviving the economy. That’s basic arithmetic.

Meanwhile, just 35 percent of Americans said the bill kept unemployment from getting worse while just 29 percent said it helped state and local governments avoid layoffs and budget cuts. But, in fact, the nonpartisan Congressional Budget Office says unemployment would be as much as nearly two points higher this year without the bill. Meanwhile, the bill’s aid to state and local governments clearly helped prevent even more layoffs and budget cuts than those cash-strapped governments were forced to enact.

Because times remain tough, with unemployment high and the recovery shaky at best, we should not be surprised by public skepticism that government’s actions of the last two years have worked as intended.

But many Americans have moved beyond skepticism to outright, if incoherent, anger at government.

“Just 22% say they can trust the government in Washington almost always or most of the time, among the lowest measures in half a century,” the Pew Research Center reported last spring. Favorable ratings for Congress are at their lowest point, 25 percent, in at least a quarter-century, while just 38 percent believe the federal government has a positive impact on their lives and 30 percent actually view the government as a major threat to their freedom.

So, confusion and anger about the federal government is deep and widespread. Americans don’t know what government does and – based on what they think it does – they are frustrated and fearful.

Why? Well, perhaps it starts with the way policymakers describe the nation’s fiscal problem and what’s needed to fix it.

At one level, this is nothing new. Policymakers have long pretended that we could merely eliminate “waste, fraud, and abuse” and solve our fiscal problem.

Lawrence Haas
is former senior White House official and award-winning journalist, writes widely on foreign and domestic affairs. His articles have appeared in The New York Times, USA Today, Los Angeles Times, Baltimore Sun, Miami Herald, San Diego Union-Tribune