There’s no such thing as a free lunch.
Don’t worry. I’m not going to produce a new insight that cost/benefit analysis should consider only benefits. But the reason for the title of this post is that a logical conclusion to draw is that Josh Barro thinks so. In “The Real Conservative Echo Chamber,” his criticism of a poll of Floridians done by the James Madison Institute, Barro writes:
Finally, instead of asking for a straight yes-or-no answer, the pollster asked if respondents favored Medicaid expansion “even if it results in tax hikes and spending cuts.” This isn’t a poll designed to figure out how Floridians feel about the Medicaid expansion; it’s one designed to get them to say they oppose it, so the organization commissioning the poll can say it’s unpopular.
First, I’m guessing that Barro is right that the poll was designed to get them to say they oppose expanding Medicaid. But his implication in that paragraph and throughout his article is that that means it was badly designed. That amounts to saying, though, that in asking people whether they favor expanding government programs, we should refrain from mentioning their costs. Which is a weird conclusion for an economically literate writer like Josh to draw.
I’m reminded of a section of one of my favorite books in economics, The Economist’s View of the World, by Steven E. Rhoads. In his chapter on opportunity cost, Rhoads writes:
Seventy percent of respondents wanted more spent on the elderly. Sixty percent favored increases both for the needy and for education. And 54 percent wanted more spent on hospitals and medical care. But when the same people were asked if more should be spent even if more taxes were required, those favorably disposed dropped to 34, 26, 41, and 25 percent, respectively. Making clear who will pay the taxes can also have a dramatic effect. One poll that found 50 percent support for the use of tax monies to supplement the cost of operating bus services found only 27 percent support a few months later when the words “personal income tax monies” were used instead of “tax monies.” We, the public, seem quite willing, if given half a chance, to believe that there is such a thing as a free lunch.
HT to Michael Cannon.
READER COMMENTS
Hans PUFAL
Feb 25 2013 at 1:56am
When asking if government should expand programs even at the cost of increasing taxes, is it not logical to also ask if that person is a) a beneficiary of the program in question and b) if they pay the taxes to be increased? I suspect that the proportion of favorable answers who pay the taxes but receive no benefits would be significantly lower.
Jim Rose
Feb 25 2013 at 5:34am
The Yes Minister has a classic dialog from the show on the value of opinion polls
Jay
Feb 25 2013 at 8:01am
To Proggers, the point about higher taxes is irrelevant because they will collect 100% of the tax they need to pay for the programs from 1% of the population.
Thomas
Feb 25 2013 at 10:02am
As on most things, I think J. Barro is letting his partisan leanings get in the way.
The hospital association in Florida published a poll, linked to by Barro, finding strong support for Medicaid expansion. That poll received statewide news coverage. Though everyone understands the games that pollsters can play, surely there’s nothing wrong with, and perhaps some value in, presenting an example of the same for the other side.
Tom West
Feb 25 2013 at 10:13am
While I’m often in favor of such social spending, I have to admit the idea of trying to “pull a fast one” by failing to mention the costs has always bothered me.
I’ve often encountered the paradigm of “the people are too stupid to know what’s good for them” from both left and right and I understand the framing makes a big difference to how people react, but I cannot let go of the idea that if you cannot lay out *all* the facts and still make your case to the people, then maybe it’s your case, and not the people that have a problem.
(Or more charitably, maybe the people are not ready for you policy *yet* and you need to do a few years preparing the ground.)
David R. Henderson
Feb 25 2013 at 11:58am
@Tom West,
Good comment, on all counts.
Silas Barta
Feb 25 2013 at 2:37pm
@Tom_West:
For once, I think you and I are in complete agreement — although I’d limit “the people” in this definition to those that are willing to take the time and effort to hear out and trace out the inferential distance in the justification of the policy.
Given the path dependency of policy, political rights, and traditions, that may not be trivial.
Patrick R. Sullivan
Feb 25 2013 at 7:30pm
If costs couldn’t be hidden there would be no politicians.
Tom West
Feb 25 2013 at 8:43pm
> inferential distance
Hey! I learned something from the Internet today!
Thanks, Silas.
Comments are closed.