Sunday, July 10, 2011

Whose Government? Whose Program?

Cory Doctorow showcases a fascinating study showing that (his words) "half of US social program recipients believe they 'have not used a government social program'" (link).  It's a telling commentary although I suspect it doesn't tell quite the same story that the headline suggests.  The difficulty is in the phrase "government social program," which predefines the issue in a way the obscures as much as it clarifies.  What, after all, is the distinction between getting money from a "government program" and getting to keep what was rightfully yours in the first place?

The question is perhaps dodgiest with respect to the home mortgage interest deduction.  When BuceCo deducts business "expenses" before paying "income" tax, is BuceCo enjoying a "government program" or merely deploying the threshold definiton of "income?"  I think that is  rhetorical question--and if the answer is "merely definitional." wouldn't the same hold true for the deduction of the interest "expense?"  And if it works for BuceCo on its business "expenses," shouldn't it work also for the homeowner's interest "expense?"

I shouldn't get carried away here: in fact I think both the business-interest and the personal-interest deduction are lousy social policy but I think they are better understood as conceptual errors rather than part of a "government program."  Or at the very least, I have some compassion for the person who thinks that both are merely ways of letting him hang onto what is his.

Veterans' benefit--GI Bill and otherwise--present a different sort of a problem.  I suspect a lot of veterans tend to think of their "benefits" as no more than part of the total compensation package, and it's hard to rebut that view: are the roughnecks down at the Internal Revenue Service enjoying the benefits of a "government program" when they draw their salaries?   I suppose we could say that we implement, say, a GI Bill to serve some larger social purpose--but I suspect you could make a similar argument about the "social program" of paying good salaries to civil servants: e.g., to build a strong civil service (and to keep them from going on the take).

[But come to think of it, I suppose I could answer myself with respect to civil-service pay.  I suspect a good deal of it serves the "social program" of  equipping people to make big bucks in the private sector.  May well be the same for military pay.]

Student aid is a more complex problem because, while it probably qualifies as a "social program" in some sense, it is far from clear just exactly who is being served--the students?  Or the college and university administrators whose perks and earnings have so vastly outstripped the cost of living over the past few decades?  Or the lenders who have a locked-in subsidized (and not dischargeable in bankruptcy) pipeline to the earnings of a lifetime?

Social Security is an interesting cusp case because I suspect that most people genuinely do believe that they get back no more than what is "theirs."  Even a cursory review of the data makes clear that this can't possibly be true: Social Security is, at the end of the day, still a Ponzi scheme, though perhaps (as Paul Samuelson said) a successful Ponzi scheme.  But we've long since cornered ourselves into the conceptual muddle of presuming that Social Security is merely a program for savings/investment.

At the other hand we have a whole bunch of programs that seem superficially to fit more clearly into the category of "government social programs," aka "handouts for the undeserving."  Indeed we've done a marvellous job over the generations of convincing ourselves that food stamps (e.g.,) are an instance of grace-and-favor which the recipient ought to grovel in thanks  (admit it now--when the lady behind you at the checkout line slaps down her food stamps, don't you find yourself casting a baleful eye on her choice of groceries, and conducting a general appraisal to identify indicia of employability going to waste?).    Yet it wouldn't take much effort (many have done it) to argue that such transfer programs too count as something enjoyed "by right" rather than an instance of sovereign alms-distribution.

So I think Cory is onto something here but I'd want to refine just what.  I suspect it's more along the line that we're all entangled with "the government" in more ways that we can comprehend or fully comprehend, and that your "handout" is not all that different from what I "am due."

Disclaimer: I haven't read the paper Cory cites.  Chances are the author develops all of these points more clearly than I have.


Mark Thoma said...

I think I'd have to agree:

Buce said...

Indeed. Had I read Mark's post before writing this one, I might not have bothered.

dilbert dogbert said...

I think I read that Krugman defined the US Government as an insurance company with an army. Maybe someone else.