A Pop Quiz About Federal Spending That May Surprise You

[Jim Lane]

http://www.realclearmarkets.com/articles/2013/03/05/a_pop_quiz_about_federal_spending_that_may_surprise_you_100179.html

The quiz consists of four true-false questions:

Question 1: The federal government is spending a larger share of national income than at any time since World War II - true or false?

Question 2: The federal government is collecting a larger share of national income in taxes than at any time since World War II - true or false?

Question 3: Social Security is currently running a deficit - true or false?

Question 4: Health care spending is outpacing the growth of income - true or false?

The author speculates that most Americans would get at least one question wrong, and would perhaps blow all four. He provides the correct answers, with supporting data, but I've reached my four-paragraph limit and I wouldn't want to include a spoiler anyway.

This piece is hosted on Real Clear Markets, which is affiliated with Real Clear Politics, which is a right-wing site -- so I'm a little surprised to find an article by a Senior Fellow in Economic Studies at the Brookings Institution. The comments, reflecting the site's normal orientation, are largely right-wing demands for lower taxes and attacks on government spending.

[oldhippydude]

1. but i just had to look.. having read the book

the answers of course will surprise none of us

[essaynnc]

2. Anybody read the comments there????

Scrolling down the comments section on the RC website, every one of them, without exception, called BS to every one of the answers. Most had facts and figures to back up their claims. So what's up with that, were we can't even agree on verify-able numbers??????

[tclambert]

3. Yeah, those comments did a lot of re-defining of terms, and in some cases, dismissing data.

The guy asking the question uses "national income" in the question then defines that as GDP in his answers. A commenter rejects GDP as the definition of national income and provides his own definition of it. I think the guy who asked the question gets to decide what he meant by national income. But if he reworded the question to say GDP rather than "national income" he could avoid this argument.

In objecting to the Social Security question, one commenter just summarily dismissed income from interest on the SS trust fund. This has become a limited right wing talking point, to say that the trust fund doesn't really exist because it's in the form of government bonds--money the government owes to the government. You don't hear this much because it implies government bonds are rubbish, when most investors consider them the safest investments available, and it implies the right wingers want at some point to "disappear" the Social Security trust fund.

I think the writer overstepped on the health care question. He attributes the change, in 2009, from increases in health care spending no longer exceeding increases in income to the effects of the Affordable Care Act (Obamacare). But that didn't go into effect in 2009. The law didn't pass until 2010, and many provisions have yet to go into effect.

[Jim Lane]

4. And some of the commenters just got things wrong

Like this comment about Social Security:

Question: When the payroll tax was lowered by 2% did it impact the Trust Fund? Answer: No...it's only make believe money in the trust fund and they can make believe they have anything they want. Obama sent a directive that they do this...

As tclambert notes, it's not make-believe money. Obama sent no directive -- the legislation establishing the payroll tax holiday also provided for a transfer from the general fund to the Social Security Trust Fund to make up the difference. The right wing is hung up on this idea that Obama is governing as a dictator.