With Economic Pessimism Rising, Americans Move Towards Keynesianism
As more signs indicate the economy has stalled and unemployment is likely to remain way too high for years to come, the American people are moving towards prioritizing spending to create jobs over deficit reduction. From the latest Pew poll:
Americans are now evenly divided over whether the federal government should prioritize spending to help the economy recover or reducing the budget deficit: 47% say spending to help the economy should be the higher priority, while 46% say reducing the budget deficit. In June, 52% viewed reducing the deficit as the higher priority compared with 42% who prioritized spending to help the economy. In February, the public was, as now, more evenly divided. Democrats remain far more likely to prioritize spending on the economy (61%), than deficit reduction (32%), and their views are largely unchanged from two months ago. But the balance of opinion among independents has shifted markedly. In June, independents prioritized deficit reduction by a 15-point margin (54% vs. 39%). Today, independents are split evenly over this tradeoff (46% deficit reduction, 47% spending to help the economy).
Unlikely just two months ago there is now a slim plurality of the country ready to embrace real spending on jobs programs. A five point increase over two months is a rather impressive amount of movement on what could be considered a fairly fundamental question of government ideology. More government spending to create jobs is exactly what Keynesian economics prescribes. The fact that, without realizing it, more Americans are open to the idea of Keynesian spending to help the economy is remarkable given how the top leadership in both political parties have trumpeted the importance of deficit reduction over all else for so long. And Republicans have been openly disparaging Keynes, just as they did in the Great Depression.
The change in attitudes is a reflection of just how seriously worried regular people are right now about what they perceive as the worsening state of the economy. Since the last time Pew asked this question the number of people who think the economy is getting worse has increase by over 10 points according to Gallup’s tracking poll.
Given how much the public opinions of leaders can shape the views of their base, if President Obama had actually spent the last several months promoting the need for more spending on jobs programs instead of foolishly feeding the deficit hysteria, we might actually have a real majority of the nation wanting to prioritize jobs creation over deficit reduction.