The Politics of Misperception

Ever wonder what our public discourse would be like if everyone agreed on the facts? You can keep wondering.

A lot of Americans don't know the precise details of how their country works. That's less a criticism than a fact -- people are busy, the way the government is run is complicated and not always transparent, and folks have plenty of other things to worry about, especially these days. And yet I'm always struck by how little the fact-based insider conversations about key budgetary matters seem to penetrate the national consciousness, allowing misperceptions to play a major role in shaping the national policy conversation. Three recent examples:

1. Almost no one knows this, but the budget deficit is going down, not up.
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According to the Congressional Budget Office:

If current laws remain in place, the Congressional Budget Office (CBO) estimates, the federal budget deficit will total $845 billion in fiscal year 2013; this will be the first time since 2008 that the budget shortfall will be less than $1 trillion. At 5.3 percent of gross domestic product (GDP), that deficit will be well below the peak of 10.1 percent in 2009 but still larger than in all but one year between 1947 and 2008 (see Figure 1-1). As a result, debt held by the public is estimated to increase to 76 percent of GDP by the end of 2013, the largest ratio since 1950.

And yet, reported Bloomberg's Julie Hirschfeld Davis in February:

The size and trajectory of the U.S. deficit is poorly understood by most Americans, with 62 percent saying it's getting bigger, 28 percent saying it's staying about the same this year, and just 6 percent saying it's shrinking. The Congressional Budget Office reported Feb. 6 that the federal budget deficit is getting smaller, falling to $845 billion this year -- the first time in five years that the gap between taxes and spending will be less than $1 trillion.

2. People think balancing the budget will lead to job growth. In fact, in the absence of strong economic growth or other sources of increased revenue, economists believe that dramatically cutting the federal budget enough to balance it would lead to job cuts and economic contraction in the short term. This is what we're seeing already with the much smaller cut of the sequester -- job cuts, pay cuts, furloughs, and so on. It's all expected to be a minor drag on the economy, clipping the rate of growth of a recovery that's just starting to heat up. But according to Politico, internal Republican polling shows that people believe cutting even more jobs by cutting the federal government by another order of magnitude will lead to more jobs, rather than more unemployment:

House Speaker John Boehner (R-Ohio), Majority Leader Eric Cantor (R-Va.), Whip Kevin McCarthy (R-Calif.), GOP leadership staff and Ryan himself were all briefed on the poll results, according to several GOP sources.

The poll showed that 45 percent of Democratic voters think "balancing ... the federal budget would significantly increase economic growth and create millions of American jobs." A sky-high 61 percent of independents and 76 percent of Republicans agree....

Seventy percent of voters in districts Republicans are targeting, and 67 percent of swing district voters support balancing the budget by reforming entitlements and cutting spending.

3. People think the country is much less economically unequal than it is. This extraordinary video tells the tale of how Americans think wealth is distributed in the United States, showing that "the ideal [wealth distribution] is as far removed from our perception of reality as the actual distribution is from what we think exists in this country."

It's been viewed nearly 5 million times, and if you haven't watched it already, you should.