Cuts and trust...

I have been pretty critical of those who think we can just slash spending to deal with the deficit.  But now adding to this conviction is the intersection of "cutters" with those who distrust government. Since the latter group is huge, I would say the overlap is immense, if not complete.

Americans continue to distrust the government, although there are signs that hostility toward government has begun to diminish. There is also considerable evidence that distrust of government is strongly connected to how people feel about the overall state of the nation.
Today, personal satisfaction is soaring, the economy is thriving and confidence in state and local governments is growing, but neither satisfaction with the condition of the country nor confidence in the federal government has been transformed. The national mood and trust are both up from the mid-1990s, but still just 20% of Americans are highly satisfied with the state of the nation and only 34% basically trust the government.
Worry about the moral health of American society is suppressing satisfaction with the state of the nation, just as discontent with the honesty of elected officials is a leading cause of distrust of government. In the broadest sense, these ethical concerns are now weighing down American attitudes as Vietnam, Watergate, double digit inflation and unemployment once did.
Disillusionment with political leaders is essentially as important a factor in distrust of government as is criticism of the way government performs its duties. Cynicism about leaders is especially critical to distrust among the generations of Americans who came of age during and after the Vietnam and Watergate eras, while performance failures are more important to older Americans.
Distrust of government and discontent with the country notwithstanding, there is no indication that these attitudes are near a crisis stage. Public desire for government services and activism has remained nearly steady over the past 30 years. And distrust of government is not fostering a disregard for the nation's laws, eroding patriotism or discouraging government service. About as many people would recommend a government job to a child today as would have in the early 1960s, when there was much less distrust of government.
Refining these views, most Americans describe themselves as frustrated with government, not angry at it. And that frustration is taking a toll on the quality and nature of the dialogue between the American public and its leaders in Washington. [More]

More importantly at this economic juncture, is how this distrust complicates any effort to cut government spending.

Basically, the federal government spends money on programs that are popular, which makes reductions in spending politically difficult. In practice, populist mistrust of government seems to me to make it more difficult to grapple with the issue. If people were generally inclined to trust government officials, then people saying “reducing the rate of long-term growth in Medicare spending is necessary to prevent the country from going bankrupt” then the public might support reducing the rate of long-term growth in Medicare spending. But insofar as people are convinced that all the money is going to (presumably non-white) moochers while feckless politicians try to steal from deserving seniors, veterans, and soldiers then operationally it’s going to be very hard to persuade people to take specific steps that save non-trivial sums of money. [More]

Now a strong argument has been advanced that the political tactic of undermining trust in government will frustrate those who want to trim it to size. In short, it appears one good way to mitigate potential large tax increases is to ease up on the rhetoric of anti-government hatred.

The received wisdom in the United States is that deep spending cuts are politically impossible. But a number of economically advanced countries, including Sweden, Finland, Canada and, most recently, Ireland, have cut their government budgets when needed.

Most relevant, perhaps, is Canada, which cut federal government spending by about 20 percent from 1992 to 1997. The Liberal Party, headed by Jean Chrétien as prime minister and Paul Martin as finance minister, led most of this shift. Prompted by the financial debacle in Mexico, Canadian leaders had the courage and the foresight to make those spending cuts before a fiscal crisis was upon them. In his book “In the Long Run We’re All Dead: The Canadian Turn to Fiscal Restraint,” Timothy Lewis describes Canada’s move from fiscal irresponsibility to a balanced budget — a history that helps explain why the country has managed the current global recession relatively well.

To be sure, the spending cuts meant fewer government services, most of all for health care, and big cuts in agricultural subsidies. But Canada remained a highly humane society, and American liberals continue to cite it as a beacon of progressive values.

Counterintuitively, the relatively strong Canadian trust in government may have paved the way for government spending cuts, a pattern that also appears in Scandinavia. Citizens were told by their government leadership that such cuts were necessary and, to some extent, they trusted the messenger.

IT’S less obvious that the United States can head down the same path, partly because many Americans are so cynical about policy makers. In many ways, this cynicism may be justified, but it is not always helpful, as it lowers trust and impedes useful social bargains.

Forces like the Tea Party movement argue for fiscal conservatism, though it isn’t obvious that they are creating the conditions for success. Over the last year, we have been treated to the spectacle of conservatives defending Medicare against proposed cuts, in large part to curry favor with voters and mobilize sentiment against the Democratic health care plan. [More]

I have been telling farmers this winter how important it is to begin to rebuild trust in our industry. Perhaps I underestimated the scope and imperative of this effort. As long as we want to fan the flames of anger and suspicion, we will be rewarded with exactly what we claim to not want.