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Democracy, Economics, Paternalism

Good Question: Why is Washington Reducing the Deficit Instead of Creating Jobs?

Yes…why is that?

Demos both asks and attempts to answer the question in full here.  And they do an admirable job in my opinion (why else would I post it right?).

They make the case that deficit reduction (in the short term especially) is not going to help the fragile economy nor create jobs.  In fact, quite the opposite.  Furthermore, it’s not a priority of the majority of Americans (see chart).

I’ll just add a couple of things. First, is that the public perception of what is a priority tends to reflect what we are being fed (i.e., see the big jump in the purple line as the debt ceiling fiasco in mid 2011).  However, even while including that factor, as Republicans and Democrats and the Pete Petersons and Fix The Debts of the world all have competed on who can do the austerity dance best, the public is STILL not buying what they’re being sold (which should tell you something).

And why might that be?

Well…as Demos clearly states:

“The focus on deficit reduction over jobs has reflected the concerns of affluent Americans and financial interests while downplaying an urgent desire by a majority of Americans to address job creation.”

Bingo.  It certainly wouldn’t be the first or the last time that a group unaffected by a situation, as the affluent are when unemployment comes calling, would miss the boat on addressing said situation.

In fact, I feel like I could put this issue of deficit reduction vs job creation as a prime example alongside a long list of issues that follow a similar pattern and have similar issues, namely:

  1. The crowd will arrive at better answers than individuals, even elite individuals, in many instances.
  2. This is especially true when addressing issues that affect the crowd (and do not affect the elite individuals) given that biases, lack of knowledge and experience, etc that the affluent have will mean that the wrong solutions are frequently arrived at, or, in this case, the wrong problems are addressed.
  3. That distortions with respect to manipulating the information the crowd receives or providing cursory inclusion in discussions and decision-making can influence the crowd to pursue a solution that is off target or, worse, for their voice to go unheard and solutions to, again, be reflective of a small group.

Demos concludes that given that “donors” (i.e., wealthy individuals and corporations that make up the bulk of campaign contributions) are influencing policy – in addition to elections – it’s necessary to get money out of politics in order to pursue policies that encourage economic recovery for all.  I think that’s true since it would likely give non-affluent Americans more influence in Washington.  That being said though, beyond money in politics, we need to take more innovative steps towards being more inclusive and realize that this is in fact, the best way to find better solutions to the problems that face all of us.

(By the way, a lot of the “innovative steps” already exist, like this, this, this, and especially this )

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