Why the Public is OK With Spending Cuts

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Greg Sargent points out today that most of the public is on the side of Republicans when it comes to the budget cuts in the debt ceiling deal:

Sixty five percent approve of deal’s spending cuts. But it gets worse. Of the 30 percent who disapprove, 13 percent think the cuts haven’t gotten far enough, and only 15 percent think the cuts go too far. One sixth of Americans agree with the liberal argument about the deal.

Well, hell, I’m not sure I blame them. The debt ceiling deal doesn’t specify where the cuts are going to come from, it just sets a cap on discretionary spending over the next decade. And although the cap does make cuts compared to our current spending levels — which have ballooned partly because of George Bush’s first-term spending spree and partly because of the Great Recession — compared to 2000 spending levels, it’s hardly draconian. Using the numbers in the text of the law for spending levels, and making some reasonable assumptions about future inflation (2% per year) and future population growth (1% growth per year), my back-of-the-envelope calculation puts real per-capita discretionary spending at the following very rough levels:

  • 2000: $2,350 per year
  • 2021: $2,650 per year

(These are in 2005 dollars because that’s what BEA uses.) Given our fragile economy, I think it’s crazy to be talking about any spending cuts in the next couple of years. Looking farther out, though, it’s hard to get too outraged over discretionary caps that still leave spending at a substantially higher level than we had in 2000. Maybe that’s why the public is OK with all this.

(The follow-on cuts, which are supposed to come from the Supercommittee in November, would reduce these numbers further. At that point you might start to see real per-capita cuts. But we’ll have to wait and see how that all works out.)

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