Why Government Officials Must Routinely Fudge Basic Arithmetic

Gary M. Galles – March 31, 2019

For as long as politicians have claimed to represent “the people,” their power has relied on the idea that governing is too complicated or sophisticated to leave to ordinary people.

Common Sense, Not Rocket Science

This, however, was not the understanding of our founding generation. For instance, Cato’s Letters, “the most popular, quotable, esteemed source of political ideas in the colonial period,” according to Clinton Rossiter, said, “The principles of government lie open to common sense; but people are taught not to think of them at all, or to think of them wrong.” Rather than needing people with special, higher understanding to take charge of us, “Every ploughman knows a good government from a bad one…whether the fruits of his labor be his own, and whether he enjoys them in peace and security.”

Experience reinforces our Founders’ view. The errors that degrade government policy choices are not sophisticated ones requiring insights “far beyond those of mortal men” from political Supermen. They are basic errors of logic and economic principles. The sophistication comes in how those errors are disguised from or misrepresented to those to be ruled as a result.

Further, such government deceptions have far worse consequences than our personal self-deceptions. We learn from them because we must bear the consequences of our blunders. The same is not true of politicians. Government’s fingers also invade uncountable areas, with trillions of dollars involved. And misrepresenting issues to create political support, following the adage that “figures don’t lie, but liars figure,” is far surer to reduce citizens’ general welfare than advance it.

Contradictory Reasoning

Consider the abuse of benefit-cost analysis in evaluating government policies. From a technique to organize and clarify our judgments, which Ben Franklin used a version of, it has morphed into a systematic way of misrepresenting reality in the desired political direction. Big government backers routinely count multiplier effects where the government spends money while ignoring that raising the money has similar effects in the opposite directions.

They ignore relevant costs (say, by treating resources already owned by the government as costless even though they have valuable alternative uses). Double counting of benefits is endemic (e.g., counting jobs created and income generated as if they are separate benefits when those are really two different ways of counting the same thing twice).

Costs and completion dates are massively underestimated, overstating benefits (that don’t start until later than promised) and understating costs (California’s bullet train offers an excellent illustration). The implied higher taxes in the future created by deficits and growing debt are routinely ignored. And those are just for starters.

Using misrepresentation upon misrepresentation, “analysts”—who know “they will never work in this town again” unless they reach the answers their employers want—can reverse-engineer the assumptions necessary to produce them.  But they have little relationship to reality and provide virtually no useful guidance.

Backward Fundraising for Massive Spending Proposals

The latest illustration of such massively costly simple errors comes from the Green New Deal and other proposals, such as Medicare for All, free child care, and free higher education, all to be paid for through taxes on “the rich.” Proponents always assert that the rich have enough to pay for each particular piece of their pipedream. But a dollar taken for one of those proposals cannot also finance other proposals, and there are not enough tax dollars to do everything proposed.

Ed Morrissey reports that economists Emmanuel Saez and Gabriel Zucman, primary supporters of Elizabeth Warren’s proposed wealth tax, estimated that it could raise up to $2.75 trillion over 10 years. But Medicare for All is estimated to cost $32 trillion over the same period. Even that draconian tax cannot even approach paying for it. And that basic mathematics error is compounded when those same dollars are also represented as able to pay for other promised programs (whose cumulative cost may be $93 trillion over a decade).

Alternatively, if the government took the wealth of every US billionaire, it could cover only about nine months of federal outlays, and only once, which could not finance multiple massive increases in government spending.

Government, supposedly the advancer of our well-being, routinely relies on logical errors, misrepresentations, and even basic arithmetic mistakes to justify its policies and proposals. Such manipulation advances the interests of those in government and their favorites, not Americans’ general welfare. As Thomas Sowell has written, “When you want to help people, you tell them the truth.”

Can anything good be inferred from how incredibly distant politicians are from that standard?

This article was originally published at Fee.org. Gary M. Galles is a professor of economics at Pepperdine University.

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