Why Debates About Public Debt Are Often Unproductive

In the past few years, there have been countless op-ed pieces and spirited debates about the level of government debt in the U.S. and in the Eurozone, whether it is a problem, and what to do about it. But rarely does it seem that anyone changes their mind as a result of all this arguing. Indeed, many people walk away from debates about government debt frustrated or even hopping mad.

My experience as a marriage counselor taught me that for a discussion of a disagreement to be productive, the parties have to have a shared understanding of what is being debated. If a husband thinks a marital debate is about leaving the toliet seat up or not, and the wife thinks it is about why her husband never listens to, appreciates or loves her the way he should, expect fireworks and frustration. If you are in an argument that you think is about government debt and it’s going nowhere, it may be because the person you are debating isn’t really arguing about the current level of government debt. Rather, they are arguing about the size of government.

If you get into a debate that is ostensibly about the level of government debt, try the following tactic (or try it on yourself in your own mind): If your opponent says that government debt is too high and we therefore need to cut public spending, ask whether s/he has EVER favored under ANY economic conditions a nice, fat increase in public spending. If you are debating someone who says that government debt is no big deal and that we should be increasing public spending, ask if s/he has EVER favored under ANY economics conditions a big, fat cut in public spending. You are going to get a no answer most of the time; maybe almost all the time.

Why does this matter? If you think an argument is about public debt per se, but to the other person it’s really about the size of government, you are going to waste time hauling out debt data from Estonia and Swaziland and the U.S. Great Depression and whatnot that you think will advance the discussion. But it won’t, because the other person doesn’t care about debt really, they just believe government is too big or too small, and any debt-related data will be attended to only to the extent it supports that stance. Maybe you are in the same boat when you argue about debt, only caring about it as a proxy for what really matters to you: the size of government.

Is that wrong? No, it’s just frustrating when you are arguing about one thing and the other person is arguing about something else (or, when BOTH of you are actually arguing about something other than what on the face of it you think you are arguing about). The solution?: Drop the charade and get down to business. How big government should be is an essential political argument for the members of a society to have, so why not just have it up front? Such a debate will be more productive (and honest) if it isn’t filtered through the Kabuki Theater of excel charts on public debt.

Comments

  1. paul says

    Even framing the issue as “government spending” is a form of kabuki as long as you don’t recognize so-called tax expenditures as spending. (And for that matter, even “size of government” is kabuki as soon as you introduce unfunded mandates.)

    • Brett Bellmore says

      In much the sense as framing the issue as theft is kabuki, as long as you don’t recognize that failing to open your wallet and give what’s in it to somebody is the same as taking that amount from them, so that the failure to engage in charity is theft. In both cases, the starting assumption, not stated, is that everything you have is already the others’ property, that it happens to be in your possession at the moment being of no significance.

      And so, if I work for a living, and get to keep some of the resulting pay, this is an expenditure by the government, which has a pre-existing entitlement to 100%, (Possibly more! Shame on me for not working harder!) of everything which happens to be ‘mine’. Anything I get to keep is just a gift from the government, and should be treated as such in any accounting.

      The reason the notion of ‘tax expenditures’ has never caught on, is because most people do on some level manage to grasp the reasoning behind it, and violently reject that reasoning.

      The same sort of ‘reasoning’ lies behind claims that the failure to increase spending should be treated as a “cut”, though that sort of ‘reasoning’ is really popular in government circles.

      • politicalfootball says

        The idea that taxation is theft is absurd. Wealth – even property itself, as it is currently understood – is a creation of government.

        • Brett Bellmore says

          See, that’s what I said: The basic premise here is that everything is the government’s to begin with, and we should regard anything we get to ‘keep’ as a gift from the government.

          It’s seldom stated so baldly, because essentially everyone but full on statists recoils in horror when it is.

          • rob says

            If taxes are theft and theft is wrong, how do we provide for governmental functions? Surely, we need some mechanism by which to fund roads, police, fire, defense, etc. Are there no legitimate government functions? Do we just rely on donations? How do we fund public goods if not through taxes?

          • byomtov says

            No Brett.

            The phrase “tax expenditures” does not reveal some hidden totalitarian motives. It’s just a convenient way to refer to exceptions to the baseline tax system. That’s all. There is no pre-existing entitlement to 100% of your income. No one ever said there was.

          • Brett Bellmore says

            What I’m denying is that there’s any privileged “baseline” taxation system, where taking less than that amount qualifies, somehow, as giving somebody something. The only baseline is zero, it’s all taking above that.

            Which is different from denying the legitimacy of sometimes taking. But taking less than your preferred amount really is not giving, any more than increasing less than your preferred amount is cutting.

            The only appropriate baseline is zero. Gotta justify anything above that.

          • Cranky Observer says

            I work with a group who are strong supporters of the Libertarian faction of the Republican Party, and they believe this line of argument very strongly. Of the seven, five attended public schools through high school. Three of the five actually attended US Overseas Military Schools (not only public schools, but union teachers! [AFT]), meaning one or more of their parents was a Federal Government employee for their entire childhood. Three of the seven took technical degrees from public universities at a time when those institutions were still primarily funded by the taxpayer (no, full cost of an undergraduate at the University of Illinois was not the $2200/year tuition). Of the two who attended private schools through high school, one mentioned that the took public transportation to school and the other was driven or drove himself on 150-year-old public streets.

            But they all earned everything by themselves, with not a lick of help from the gub’mint or “society”.

            Cranky

          • politicalfootball says

            And yet, Brett, you’ve got no argument against the reality of it beyond saying you are appalled by it.

  2. Henry says

    Those capitalized “EVER”s should be modified. Those who want to cut public spending rarely want to cut the military budget. Those who favor more public spending often want to cut the military budget.

    • Keith Humphreys says

      I thought of that, but cutting/raising the military budget is not equivalent to cutting/raising public spending, i.e., the person who wants to redirect some defense spending to health, education and welfare (as many do) is not endorsing public spending cuts, but how the spending is allocated.

      • Ben says

        So, is it fair to say you have conservatives in mind as people who mean size of government when they say debt? I can’t see that it fits liberals very well, in practice.

        I mean,usually when people advocate the sort of defense redirection you mention, they think it kills two birds with one stone. They think reducing defense spending is good, even if we don’t increase health-and-welfare; and they think increasing health, education and welfare spending is good, even if we don’t cut defense. What side of the size-of-government debate does that set of views put them on, and why?

        • Henry says

          By the same token, wouldn’t conservatives favor increasing military spending, even if we don’t reduce health and welfare spending, and favor reducing health and welfare spending, even if we don’t increase military spending? Maybe I should withdraw my comment below that Keith made a good point that it’s really about how spending is allocated. Then, again, most liberals want both to reduce military spending and increase health and welfare spending, and most conservatives want the opposite. So it seems a moot point that they would favor one without the other, and maybe it is really about how spending is allocated. My head is beginning to hurt.

          • Ben says

            > By the same token, wouldn’t conservatives favor increasing military spending, even if we don’t reduce health and welfare spending, and favor reducing health and welfare spending, even if we don’t increase military spending?

            That’s probably true, and would seem to describe the revealed preferences of the W. Bush administration and the current House Republican caucus, respectively. I was asking if conservatives-as-the-deficit-charaders was what Keith had in mind; I think that no one really cares about the size of government, on its own.

          • Brett Bellmore says

            I would generally be regarded as a ‘conservative’ here, and I am very much in favor of reducing the size of our military. I don’t think we should be out there defending the entire world, unless the world were willing to pay for it.

          • Henry says

            Brett, I infer from your past comments that you are not a typical “conservative,” so your favoring reducing the size of the military is irrelevant for present purposes. You seem atypical in the sense that, unlike most “conservatives,” you are not hypocritical in claiming to oppose big government but opposing it only when it regulates business or gun rights, and not objecting to excessive military spending, torture, excessive incarceration, violations of the Fourth Amendment, violations of the Fifteenth Amendment, restrictions on abortion, restrictions on marriage by gays, and so forth.

          • Henry says

            When I said that conservatives oppose big government only when it regulates business or gun rights, I should have added “or when it spends money to help poor, sick, or unemployed people.”

        • Keith Humphreys says

          Serious question: Is there an example of a liberal politician saying we should cut defense spending by some amount and then return that same amount to the citizenry as a tax cut? I have never seen that, only spend less on the army and more on something else as the proposal. But I would be interested in counter-examples.

          • Ben says

            Both Obama (fiscal cliff) and Clinton signed budget deals that cut defense and reduced the deficit. Close enough? They’re not tax cuts — though I could do fancy footwork with avoiding a tax increase relative to current-at-the-time law in the fiscal cliff deal.

            There’s also Jimmy Carter, who passed tax cuts and tried (not always successfully) to limit defense spending.

          • Keith Humphreys says

            Ben: Both Clinton and Obama went for big stimulus spending packages in their budgets (Clinton’s was killed, but still he wasn’t trying to shrink the state).

            I don’t know enough about Carter’s policies to address that one.

  3. Ben says

    Size-of-government is also a charade, hiding disagreements over particular policies. I’d be thrilled, in non-keynesian times, to reduce the size of government at the expense of miltary spending, farm subsidies and highway construction. And delighted to increase it if we spent more on research, aid to the poor and snazzy trains. I don’t have an attachment to any particular percentage of GDP, and I’d be curious to meet anyone who does.

    • byomtov says

      I agree that size of government is a charade.

      Yet many conservatives do seem attached to some arbitrary percentage of GDP as an absolute upper limit on spending. Haven’t there been bills, even Constitutunal Amendments, proposed that set such limits?

  4. kmgriff says

    It’s not really about the size of gov’t. It’s about what kind of gov’t and society we want to live in. The size is determined by what we want from our gov’t, and what we are willing to pay for., so we have to start with what we want. Corporate welfare or people welfare, endless war with nebulous goals, or effective, intelligent defense, etc. We are a big nation and we will have a big gov’t. the question is, as always, who benefits?

    • CJColucci says

      Yes. There is a constituency for which small government is, in and of itself, a goal. There is no comparable constituenmcy for big government in and of itself. There are, to be sure, many separate constituencies who benefit from government spending on themselves; and, in the aggregate, they may well be a powerful force for general increase in the size of government, but mostly they are indifferent to the level of government spending on others as long as they get theirs. Then there are constituencies who want particular problems solved and think, rightly or wrongly, that a government program is the way to solve them. But most of the time these constituencies, whatever their initial leanings, are not, in principle, opposed to a small-government or free-market solution if they can be persuaded it will solve the problem. I can think of very few politically significant advocates of big government as such; the sum of their policy preferences may lead to big government, but that’s a different matter.

  5. SamChevre says

    Typo note If you are in an argument that you think is about government debate and it’s going nowhere

    Debate should be debt.

    Serious comment:
    The other issue (even once “size of government” is agreed on as the topic) is how to measure that. Social Security is a large portion of government spending, but seems to be rarely what people are talking about when they talk about the governmetn being too big. Too big is often a way of saying “too intrusive”–things that used to be cheap are expensive because of new regulations (e.g.–septic systems and gravel parking lots cost 10x what they did 20 yeras ago here in VA), things that we’ve always been able to do take special qualifications and licenses, etc. The actual government spending on collecting the information Snowden publicized was trivial.

    • Keith Humphreys says

      Debate should be debt.

      Thanks…It must be Monday morning — two typos by me and several others by commenters.

  6. Mike says

    Keith wrote: “The solution?: Drop the charade and get down to business. How big government should be is an essential political argument for the members of a society to have, so why not just have it up front? Such a debate will be more productive (and honest) if it isn’t filtered through the Kabuki Theater of excel charts on public debt.”

    Why not have such an argument up front? It’s because the public debt is being used EXACTLY as a distraction from just such a debate.

    Framing the public debt as if it were a household account is a tactic designed to get the ignorant to believe that the government should operate just as most of us do, at a loss if we don’t worry about every last cent and worrying about that next paycheck being the last if we do break even. It’s nonsense and a fundamental misreading of both macroeconomics and the place of the US in the world economy, which I won’t bother with as we’re focusing on the role of the debt.

    What the debt debate is all about is a shell game, where working folks somehow believe that funds sent to the government will accrue back to them personally. In fact, those promoting the debt debate want government out of the way so they can get their own hands deeper into our wallet without all that government interference, like public education, building infrastructure, sponsoring basic research, support for those who can’t or don’t make enough to support themselves, etc.

    The public debt is an investment in our future. Without it, only those who have the luxury of investing will decide our future.

    • CharlesWT says

      Government debt is different from household debt in that no one except the federal government gets issued an open ended credit card from the Federal Reserve.

      • Dennis says

        Government debt is also different from household debt in that government is allowed to determine within broad limits what its income will be. The clown class passing as the GOP Caucus in the House refuse to address the public debt at the same time they harp on its horrible effects.

        Hypocrisy, much?

      • J. Michael Neal says

        It’s also different in that the federal government is large enough that its decisions about debt levels have macroeconomic effects while no household is large enough to do so.

        • Mike says

          Yes, it could have. But since both major parties lack a commitment to a jobs-driven recovery, we’ve seen a rather tepid and lackluster effort to stimulate the economy as we should in such circumstances.

          Then you can look at the size of the federal debt to both GDP and gross receipts and you can see it’s relatively small. Sure, people can talk hysterically as if the debt will do us in, but it is a quite small percentage when compared to average household debt, average corporate debt, just about any measure one wants to make. All the “sky is falling” talk on the national debt has been as marked by its lack of factual basis as it has been its theoretical speciousness.

          And we’ve been here before. FDR was boxed into the same corner in his second term by his timid stimulus, much as Obama is, except that FDR probably could have scared up enough Congressional support to do more if he desired, as Obama hasn’t been able to do. The end result was the Great Depression lingered years longer than necessary, with WWII finally creating the demand it took to put us all on our feet and deliver postwar prosperity.

          America has great needs. Interest rates are as lower as they’ll ever likely be. The USA, despite the bi-partisan economic skullduggery of austerity and tax cuts to the lifeboats before the rest of us and Republican efforts to ruin our credit rating, is still regarded as the safest investment in the world by investors. It’s time to think big, invest on our future, and put America back to work.

          It COULD spend enough to affect the economy, but there’s been little sign of that lately. Please don’t imply that would be a bad thing, if it happened. It would be the best thing in the world if you need a job.

  7. Sebastian H says

    The real question to reveal economic beliefs about the debt is: are the ever economic conditions where you would favor increases/cuts in spending when your opponents controlled where most of them were? I feel like most of the debate about debt ends up being obstructionism by the party out of power. An example that concerns me, even from someone I agree with is Krugman. (I agree that we shouldn’t be worrying about debt when interests rates are so low and unemployment still so high). But Krugman was a deficit hawk all through the Bush years, chaning his mind about the debt literally as the election returns showed Democtats winning. That doesn’t inspire confidence.

    • J. Michael Neal says

      By leaving out his reasoning you end up misrepresenting his point: that there is no purpose to one party being concerned about deficit reduction in a system where two parties alternate power if the other party has demonstrated that it has no commitment to deficit reduction. The Democrats spent the 1990s being concerned about the debt and did a good job of dealing with it. That didn’t lead to any long term benefit on the debt, though, because the Republicans simply wrecked the trajectory.

      So the effect of unilateral concern about the debt is not debt reduction; it’s a huge debt created entirely by the opposition’s policy preferences. And so the reason Krugman changed his position on debt reduction as soon as the Democrats came back into power wasn’t any change in his level of concern over the debt. It was simply that the Democrats had already demonstrated such a concern and the Republicans had not. There was no point in hectoring them about the debt until there was Republican buy in that we still haven’t seen.

  8. CharleyCarp says

    It’s never about Debt, agreed. It’s also not about Size, usually. It’s nearly always about Allocation. But that argument exposes one side to serious and true charges of heartless bias, and so must be dressed up as if an argument about Allocation was really about economic principles. ‘I’m sorry, we can’t spend more of our money to help the unfortunate — wish we could, but our principled adherence to the principles of avoiding Debt and minimizing Size preclude this. (Although they don’t preclude most of the things we actually do want to do).’

    • Ebenezer Scrooge says

      Zackly.
      This isn’t a case where clueless hubby thinks it is about the toilet seat, and the wife thinks it is about communication. This is a case where the husband knows damned well it is not about the toilet seat, but knows he will lose if the dialogue is conducted on the wife’s terms. In other words, when one of the parties has a vested interest in obfuscation, there is really no point in talking.

      • NCG says

        Yes. I find that having debates about big-picture views is usually a big waste of time. They are useful for getting to know someone, but I don’t think anyone ever wins or loses. I avoid them unless the debate itself happens to be interesting. It usually isn’t.

  9. Andrew Laurence says

    There are three separate questions:

    1. What should government do and what should it not do?
    2. How much should it spend on the things that it does?
    3. Where should it get the money to spend on the things that it does?

    It is indeed foolish to conflate any of these.

    • Brett Bellmore says

      To conflate them, yes. But it isn’t necessarily fooling to care about more than one at a time.

  10. MobiusKlein says

    Can I generalize this?
    Debates about * are often unproductive, because people don’t care about judging the arguments honestly, or present their arguments honestly.

    Ever.

    • politicalfootball says

      I think that takes an unnecessarily dim view, but it also highlights the problem with the analogy in the original post. The husband and wife in the cited example are misunderstanding each other. People who talk about deficits when they really mean that we should do less to help poor people are lying.

  11. bobbyp says

    I posit the question is, as eloquently stated above, one of allocation of real resources. It’s an argument about who gets what, and it’s decided by politics. To me it is also important to stake a position about the productive capacity of the economy. Millions of unemployed is a wasted resource. Involuntary loss of work time is an asset that can never be recovered. Hence liberals will tend to not want to simply cut public spending and “give it back” because we are rarely at full employment.

    In a different context, Lenin famously asked, “What can be done?” The liberal reply is: “There’s always something.” That is not a bad thing.

  12. Keith Humphreys says

    To all: What interests me the most in this thread is that while many people said that debt arguments are not about the size of government but something else (a range of ideas were proposed), *no one* advanced the argument that debt arguments are really, truly about debt!