The People’s Money; How voters will balance the budget and eliminate the federal debt, Scott Rasmussen, Simon & Schuster (2012)
Scott Rasmussen is a first-rate pollster with conservative leanings. We appreciate his oft-expressed view about the disconnect between the objectives of the Political Class (who want to raise taxes and expand the government) and the general public (who feel they are overtaxed already and would like the government cut down to size).
It is as though the politicians wanted to emulate the British bureaucrats who oversaw the American colonies before 1776, argues Rasmussen in this book. They don’t seem to realize that Americans are upset and preparing to lower the boom.
What about polls indicating the public’s generalized support for spending cuts dissipates as soon as the questions turn to would you cut this, that, or the other category of spending? Those polls don’t go far enough, says Rasmussen, because the public has specific ideas about where to cut.
Thus, in one of his polls, 54% of respondents said the federal government “needs” to spend more on infrastructure projects such as road, bridges and trains. But 53% want subsidies to Amtrak ended vs. only 33% who think they should continue.
The analysis of the current fiscal situation is workmanlike but hardly novel. National Debt over $15 trillion and climbing rapidly, situation looks far worse if unfunded liabilities are factored in, trust funds are a sham, politicians of both parties have been deceitful because they want to raise taxes for more and bigger government programs.
Rasmussen then proceeds to lay out what the public supposedly thinks should be done about defense spending, Social Security, Medicare & healthcare, the tax system, welfare programs, and corporate welfare. His premise is that the public’s ideas can be translated into specific & workable reform plans.
The analysis falls short, in our opinion. (1) The public often wants to have their cake and eat it too – it’s not entirely fair to blame the politicians for telling people what they wanted to hear. (2) Some of the plans are not overly practical. For example, Rasmussen dismisses the idea of an individual account option for younger workers as a right wing idea that would permit individuals to “opt out of Social Security.” Yet, he would allow workers to reduce the tax rate they pay in return for choosing a later retirement date, with periodic dates at which they could revise their initial decision. The administrative complexities and potential for gaming the system are mind-boggling! (3) Holding national referendums on the Social Security reform plan, the Medicare & healthcare reform plan, etc. would be chaotic too, but Rasmussen recommends this approach on grounds that Americans don’t trust politicians on matters of such importance.
At the end, there is a 10-year financial projection without and with the People’s Money reform plans – presented in nominal dollars. Sure enough, a projected deficit of $1.3T in 2021 (by coincidence the same deficit as in 2011) in the status quo projection becomes a $0.1T surplus. This result is achieved by slashing 2021 outlays by $1.7T, with only a minor reduction in the projected doubling of taxes collected.
As for who would flesh out the details of this plan and set it in motion, the book doesn’t say. But without some of those reviled politicians getting involved, it is hard to see the People’s Money ideas going anywhere.