Monday, February 21, 2011

Voters Are In Denial About Social Programs

What percent of people getting aid deny they are getting aid?

I’ve gotten 3 of those. My immediate family has gotten 4. I was raised middle-class, and it’s fair to say I’m upper middle-class now. But, I’d freely admit to getting government aid, and be able to label it as such. How is it that so many other people can’t? Is it because I’m an economist, or is it because outside of economics recognizing government aid for what it is does not qualify as politically correct?

The chart is draws from David Wessel’s February 17th column in The Wall Street Journal. It’s about the bipartisan deficit cutting commission that Obama established:

If the strategy was to give the president cover to offer his own plan after the election, it failed. The president and his team decided any specifics they offered would have been shot down by Republicans. So they didn't offer any big ones in his budget.

P.S. Have you noticed that 25 years ago we started treating interest payments differently for firms and households? Firms get to deduct them before paying taxes. Households used to be able to. But, then they changed it so that only mortgage interest could be deducted. And then people started taking out home equity loans as a way to deduct their credit card interest, and everyone became interested in owning a home whether or not they could afford it. And then … well … you know how it turned out.

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