Reason-Rupe Public Opinion Survey

Survey Says: Keynes Is Dead

A new Reason-Rupe poll finds that Americans are willing to cut spending of all kinds, even in times of crisis.

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In 2008 Americans could not get enough of John Maynard Keynes. As the economy tanked, the long-dead 20th-century British economist emerged as one of the most popular men in recession- haunted Washington. Keynesian stimulus spending—massive infusions of cash from the federal government for infrastructure programs, weatherizing, green energy, education, and anything else that came to mind—was going to prevent job losses and get the economy working again. More than $500 billion in American Recovery and Reinvestment Act spending later, unemployment sits at an intractable 9.1 percent, the labor-force participation rate is the lowest since 1983, and the economic prognosis remains bleak. 

Three years after the financial crisis, four decades after Richard Nixon and Milton Friedman made the phrase "We are all Keynesians now" part of the popular lexicon, and more than half a century after Keynes died, a national Reason-Rupe public opinion survey has found that Americans are firmly rejecting Washington's favorite economist. In polling conducted in August, a majority of Americans—more than 57 percent—say reducing government spending will "mostly help" the economy. Just one in five believes cutting spending will "mostly harm" the economy.

Voters also support reforms aimed at limiting elected officials' ability to squander money. More than 77 percent of Americans believe the federal government should have a spending cap preventing it from doling out more than it takes in during a given year; 62 percent believe this "strongly." In addition, 69 percent favor (and 50 percent strongly favor) a constitutional amendment requiring a balanced federal budget. These findings mirror those of a CNN/ORC poll taken around the same time, which shows between 60 percent and 75 percent supporting a balanced budget amendment, depending on how the question is phrased. "Keynesian policy and Keynesian theory is now done," Texas Gov. Rick Perry declared, perhaps a bit prematurely, at a Republican presidential debate in September. "We'll never have to have that experiment on America again." 

No matter who takes power next November, Americans are not optimistic that elected officials will stop dishing out dollars, even at a time of runaway deficits and degraded credit ratings. Government spending and debt, along with high tax rates, routinely rank near the top of voter concerns. When asked in the Reason-Rupe poll how to deal with reducing the national debt, 57 percent said the solution should focus mainly on spending cuts. In fact, 37 percent wanted to focus entirely on cutting spending with no increase in taxes. Only 23 percent wanted equal emphasis on taxing and spending.

Still, nearly 69 percent of voters expect their taxes to go up in the next five years, compared with only 6 percent who expect taxes to go down. And when they do go up, 62 percent of Americans expect Congress to spend those increased revenues on new programs, not on paying down the debt. (Probably related: Congress's approval rating currently sits at a spectacularly low 14 percent.)

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As more than one observer has pointed out, calling for reduced government spending is one thing, while showing a willingness to sacrifice your own entitlements is another. The trillions of dollars required to keep promises made by Medicare and Social Security in the coming decades make stimulus outlays look like pocket change. With rare exceptions, politicians will tell you that Americans have no stomach for entitlement cuts. This analysis is bolstered by poll after poll showing everyone from Tea Partiers to Teamsters unwilling to consider substantial reform. But Americans aren't really so universally opposed to tackling entitlements. Pollsters have just been asking the wrong questions.

The Reason-Rupe poll finds that most Americans are actually open to reform of Social Security and Medicare—as long as they can get back the money they have already paid into the system. In fact, 61 percent would be willing to see cuts in their own current or future Social Security benefits, and 59 percent would accept cuts in their Medicare benefits, under a system where they are guaranteed to get back what they and their employers have already contributed. 

The poll calibrated these results by asking the standard questions first: Would respondents be willing to have their current or future Social Security benefits reduced as part of a plan to balance the federal budget? Congruent with other polls, 57 percent of Americans opposed that. Asked a similar question about Medicare, 51 percent were opposed. 

But unlike other polls, Reason-Rupe did not stop there. Follow-up questions probed conditions under which Americans would be willing to accept cuts in their benefits, asking about a scenario where beneficiaries were still guaranteed to receive at least the amount of money they have kicked in. That's when the results flipped, with about 60 percent open to cuts in their payouts from Social Security and Medicare.

Social Security reform enjoys support across all major political groups, with 65 percent among Republicans, 59 percent among Democrats, and 61 percent among independents. Similar majorities of all political affiliations support Medicare reform. In addition, most Americans favor allowing workers to opt out of Social Security (54 percent) and Medicare (56 percent), which is another sign people are open to new proposals. 

The responses suggest that Americans have a fundamental misunderstanding of the way entitlements work: They envision Medicare and Social Security as secure, trust-fund-style accounts, as opposed to pay-as-you go transfers. But there is some useful and even hopeful information here for would-be reformers. Americans understand that the essentially unlimited benefits currently promised by Medicare are not possible; they just want to make sure they don't get shafted. 

Keynes may be done for, as far as the American people are concerned, but his mustachioed ghost still haunts the halls of official Washington. Americans don't want government to respond to our economic woes with more spending, but they know their representatives disagree. And most of those politicians are throwing up their hands (and hiding under their desks) when faced with the prospect of making hard decisions about entitlement reform. Given all this, it's no surprise that nearly half of Americans surveyed by Reason-Rupe—48 percent—would consider voting for a third-party candidate who is economically conservative and socially liberal. 

What can explain such widespread dissatisfaction? An August Washington Post poll hints at the root of these findings: 73 percent of Americans doubt the federal government's ability to solve economic problems—dramatically up from 52 percent last year and 41 percent in 2002. It appears that the more the government tries to fix the U.S. economy, the less satisfied Americans are with the results. 

The Reason-Rupe poll, conducted August 9-18, 2011, surveyed a random national sample of 1,200 adults by telephone (790 on landlines, 410 on cell phones). The results have a margin of error of plus or minus three percentage points. The poll was conducted for Reason Foundation by NSON Opinion Strategy.

For more information about the Reason-Rupe Polling Project, visit reason.com/poll, or contact Emily Ekins, polling director at the Reason Foundation.

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  1. I guess Keynes was right, but the long run took a little bit longer to get here than he figured.

    1. ? The white man makes a big fire and is cold.
      ? The Indian makes a small fire and is warm.

      Translation:

      ? In a society with high energy consumption, people are unhappy.
      ? In a society with low energy consumption, people are happy.

      Ya’ll carry on and have’um heap big time now!

      1. Officer, am I free to proctor and gamble?

  2. Well, in the long run…

    1. + a trillion dollar Keynesian stimulus.

      1. …the spending “cutters.”

        You understand, even if only partially, that:

        Thesis #14: Complexity is subject to diminishing returns.
        Thesis #15: We have passed the point of diminishing returns.
        The Thirty Theses
        Jason Godesky
        http://rewild.info/anthropik/thirty/

        Go ahead, bring on the crash of civilization. Really.

        Wovoka has spoken.

        1. …everybody studied me in Econ 101, right? If not, don’t spew your ignorance.

          1. Quit feeding the troll.

            1. That was pre-emptive!

            2. I don’t think they are going to get fed much. They are what they are. There is no point in engaging them.

                1. Well…what a coincidence and within 5 or 6 entries of each other.

                  Which personality is dominant these days Rather/White Indian?

                  Just for the record.

                  1. Just for the stupid, who think correlation does imply causation

                    -When I’m not on the same post, I’m accused
                    -When I’m on the same post, I’m accused

                    1. The stOOpid arrives in yet another thread.

                    2. Mr. FIFY, get your mouth off of Officer Gambol’s dick; his spooge his making you stupid too

                    3. While I am all for the concept of mouths being on dicks, I chose not to be the mouther a long time ago. Have absolutely no interest in being the giver.

                      I do hope we’re clear on this, as I would hate to have to dumb it down for you.

        2. MARX: NO!
          MISES: NO!

          The MARX-MISES axis of evil is in the house, aggressively enforcing Gambol Lockdown.

  3. Keynes will never die, like Freddy Kruger he will come back again and again, no matter how dead one thinks he is this time.

    1. Agreed. Politicians will always favor Keynesian economics. It will be up to the people to keep rejecting it. It will win sometimes and lose other times, but it will never go away.

      1. …problem?

  4. In 2008 Americans could not get enough of John Maynard Keynes.

    Nonsense. Don’t confuse Washington Beltway elites with “Americans”.

    Had America known ahead of time the kind of maniac Obama really was, he never would have been elected in the first place.

    1. Bah. It would have worked if we had just spent $2,000,000,000,000 more. $4,000,000,000,000 more tops.

      1. Trillions don’t even look real when you write out the zeros. They look like a joke number.

        Joke’s on us, I s’pose.

      2. And if that wouldn’t have done the job, it is because we didn’t break every single window in America. Which is why, I, Keynesian Banjos, submit my plan in which I will go around America and break every single window. I am going to require a lot of loud, angry music.

        1. You’re too late. Obama’s running around breaking all our roads with his limo.

      3. I vaguely recall Krugman proposing (with a straight face) something like 5 trillion.

    2. Alternatively, had Americans read more than one chapter of nearly any economics book, Obama would never have been elected to -any- office.

    3. Had America known ahead of time the kind of maniac Obama really was, he never would have been elected in the first place.

      Yes, they would have. 2008 was a referendum on the Republicans and Bush. Obama was the beneficiary of self-inflicted Republican wounds just as 2012 will see the election of the Republican nominee due to self-inflicted Democrat wounds.

      Hopefully, the cycle of punish-the-incumbent elections will be broken before the country is broken.

  5. ?Qui?n est? m?s muerto, Milton Keynes o Francisco Franco?

    1. I’m gonna have to go with Franco. Nobody here in America proposes his shitty ideas every time something goes wrong whereas Keynes looms large.

      1. It’s Maynard Keynes, not Milton.

        1. Milton Keynes is a town in Buckinghamshire in the UK.

          1. And I do know someone who used to live there.

            That’s my story and I’m sticking to it.

            1. At this point, we’d almost be as well off with Francisco Franco in power.

        2. I think he was implying Friedman was as bad as Keynes. And there is some merit to this argument. Friedman was the father of income tax withholding (which made the IRS more ‘user’ friendly) and freely floating fiat money.

          He also won a nobel prize for neglected primary blame away from the Fed by saying the depression was (in very Krugmanlike manner) because the Fed didn’t do enough.

          That is a very pernicious and deceptive argument.

          So while Keynes needs to die, so too does Friedman zombie Chicago school.

          Which is not to say Friedman was likable and correct on most economic things, other than his primary work, monetary economics.

          1. ‘neglected’ should be ‘deflecting’, not sure how I did that;)

  6. That face is extremely punchable. God I wish I had a time machine.

    1. He wasn’t a bad guy. People really couldn’t make sense of the great depression. He made some good points. But even he towards the end of his life had given up on the idea of using public works projects to stimulate the economy. Liberals never want to discuss that.

      1. Piffle. He was evil to the core. An Ivory Tower elitist that knew he could get people to swallow his poison whole and pushed it on the world for his own amusement. The fact that he didn’t die by fire is proof positive that god hates us.

        1. Really Warren? It has been 20 years since I took economics classes. But I never remember thinking Keynes was evil. It is not like he advocated eugenics or a totalitarian state or anything. Maybe he did and I just have forgotten.

          But being wrong doesn’t make him evil. And I don’t think he pushed his ideas for amusement. He beleived them.

          1. It’s really the politicians that advocated Keyesian economics to further their own agenda rather than Keynes himself. People wanted Government to “do something” and Keynes provided politicians with the rationale for doing such.

          2. Depends on what you’re wrong about and how much harm you cause, don’t it? At some point, you cross over from “sincere but misguided” into active evil.

            1. Well, Keynes frequently debated his ideas with Hayek at least, on a friendly level. I think he was suffering more from confirmation bias more than a religious belief in his theories.

              1. …dogma permits no confirmation bias. The canon says so.

          3. Also, as I recall, he was all about gov’t spending to stimulate the economy when times were tough and austerity when times were good, politicians seem to always forget that second part (except Clinton maybe). It is hard to know how well his theories work since they are implemented by politicians. Arguably, by not curbing spending during a strong economy the gov’t exacerbated a bubble.

            1. and austerity when times were good, politicians seem to always forget that second part (except Clinton maybe)

              What planet were you living on during the Clinton years? Clinton’s spending impulses was reined in somewhat by the Gingrich revolution, but during the first couple of Clinton years, Clinton was arguing that taxing and spending had to be increased during good economic times in order to build a surplus for the bad times.

            2. Liberals never want to cut spending, except for the military (and even then, they exempt a lot of military cuts from their masturbatory wish-list when Team Blue is in power).

              Yes, military spending needs to be cut… along with across-the-board for everything else, if not eliminating a good chunk of spending.

              Spiteful interjection from Tony or some equivalent in 3…2…

              1. Wow, he’s running late. Amazing.

          4. I think there is a big component of “the noble lie” baked into a lot of Keynes’ crap. Like using inflation to counteract wage stickyness? What is that but, “well these workers are too stupid to realize they are going to have to accept lower wages, but we can trick them with inflation!”

            I think he thought his policy suggestions were right, but most of his reasoning was just whatever line of shit he could come up with to talk the dunces into believing him.

          5. Keynes served on the board of directors of the British Eugenics Society.

            1. Ayn Rand advocated Genocide, so Keynes was at least only small potatoes.

              1. Rand was a fucking piker compared to me.

          6. And I don’t think he pushed his ideas for amusement. He beleived them.

            Keynesianism is the Scientology of economics. Pure hokum written by a man that understood people wanted hokum.

            1. I think you are being a bit histrionic Warren.

            2. Doctor, I thought it was the stomach flu, but it turns out I was sick from Keynesian Thetans.

          7. It is not like he advocated eugenics or a totalitarian state or anything. Maybe he did and I just have forgotten.

            He sure was cozy with the Reds though. Even later.

          8. So what you’re saying is that he was really, really stupid.

            Stupid on such a level that even people with just a rudimentary knowledge of economics should be able to see how stupid he really was.

            P.S. You don’t have to be evil on the level of Adolf Hitler to qualify as evil. You’re deliberately exaggerating so Keynes would look morally better in comparison to your extreme examples.

          9. He wasn’t evil, he was just a pompous ass eugenicist with delusions of grandeur. He was almost half as intelligent as he thought. TP was about useless and GT was completely incoherent.

            His works were certainly used for evil though. GT is like the bible, it’s so confused you can use it to support almost any intervention you want.

    2. I wish I had a time machine

      Do you have a shovel?

  7. Keynes may be dead, but James Brown is still alive.

  8. WHO answers “don’t know” to these polls?! You at least have to admire such people for their honesty, I suppose.

    1. People who haven’t deluded themselves into thinking a layman can understand complex systems that they’ve hardly studied would probably answer “I don’t know” to lots of these questions. But, yeah, that’s a special kind of honesty.

      1. So… now *you’re* saying what I explained about Tony: Ordinary people aren’t equipped to opine about complex matters unless they’ve passed some series of tests.

        Pitiful.

  9. One quibble: Keynes’ economics were awful, but he believed governments should scale back their spending once conditions improve. So Keynesian politicians today aren’t (strictly speaking) very good Keynesians. They only pay attention to the part of the story they like.

    1. People like to accuse libertarians of being unrealistic, yet the people who support Keynes believe that somewhere out there in the world there is a politician who actually will cut spending when times are good.

      1. Don’t forget the “animal spirits” of the market.

    2. ^^This^^ He also admitted later in life that cutting taxes or just giving away money was a more efficient way to stimulate the economy than public works projects.

      Keynesian economics is just the brand name for big government statism. It bears no resblence to what the man actually said.

    3. he believed governments should scale back their spending once conditions improve.

      Dunno about “evil”, but anyone who thought that was gonna happen was criminally stupid.

      1. Not in 1934 he wasn’t. Goverments were much smaller and much less repacious than they are now. There were tons of examples of governments spending a lot of money (usually for a war) and then going back to their normal small size after the crisis was over.

        1. People were tougher then too and less likely to have an entitlement mentality.
          As late as the seventies, my grandfather would have starved to death rather than take gov’t assistance. He was a proud man.

          1. My grandparents and parents were the same way. What Keynes didn’t count on was what welfare would do to the souls of those who recieved it.

    4. Thanks Nick, I was going to make the same point. Also Keynes advocated tax cuts in a recession and increased taxes in an expansion (what is the correct economic term anyway?). I’m not a Keynesian myself, but I do think he’s got a bad rap because of his followers.

  10. Reason really needs to put an end to its polling experiment. Poll results reported here are the worst sort of SPINNNNNNNNN!!!!! it for our side. We keep hearing over and over again how we’re on the verge of libertaration. And still everywhere you look it’s all the same Red Team/Blue Team ? MAKE IT BIGGER.

    Don’t take comfort in the Tea Party candidates in office, they have shown themselves to be impotent, unwilling to take a hard stand and see it through. And for FSM sake don’t take comfort in minority/challenger Republican rhetoric in an election year – THEY’RE LYING.

    1. Yup Warren. Neither side is willing to cut spending. We are going to go bankrupt. It is not a question of if but when.

      1. No way! Zimbabwe isn’t bankrupt yet! /sic

        1. Well as long as there is a press that will print…

          1. I highly recommend US Treasury invest in some spare press parts before inflation makes the investment impossible.

      2. What? No hope and love for the super duper hopey changey budget cuttin’ committee? They won’t save us all with their skillful and adroit manipulations of the federal budget? For shame, John. Those are Top Men!

        Top! Men!

    2. Warren, leave the hopeless negativism to me. It doesn’t suit you.

      1. Hi Paul 🙂
        Long time no banter.

  11. Man I want to marry her.

  12. Is anyone else impressed that a non-statistically insignificant number of Americans know who Keynes is?

    1. Lots of Americans know that Keynes is a rapper.

  13. I think one need look no further than Heny Hazlitt’s Failure of the New Economics to see a thorough refutation of Keynesianism. His concluding paragraph on the chapter on Unemployment & Wage Rates:

    Nor shall I go at length into the reasons why unemployment is not caused, as Keynes insists, primarily by maladjustments between the rate of interest, the marginal efficiency of capital and investment. It is sufficient to point out not only that his theory of interest is completely false, but that interest rates are extremely fluid and flexible, that they are determined by full competition among lenders as well as borrowers, and not held rigid by compulsory collective bargaining, union monopolies and mass picket lines.
    It is more instructive to inquire why Keynes put forward this extremely complicated and implausible theory. And here we may have to answer that, siding as he did with the immemorial labor-union insistence that employment is not caused by excessive wage-rates, he had to come up with some theory as to what does cause it. And as he couldn’t blame the labor-union leaders, what more natural (and politically convenient) than to blame the moneylenders, the creditors, the rich? Like Marxism, this is a class theory of the business cycle, a class theory of unemployment. As in Marxism, the capitalists become the scapegoats, with the sole difference that the chief villains are the moneylenders rather than the employers.
    And that, I suspect, rather than any new discoveries of technical analysis, is the real secret of the tremendous vogue of the General Theory. It is the twentieth century’s Das Kapital

    1. There is a very effective refutation of Keynes in Paul Krugman’s book Peddling Prosperity. It was written before Krugman went insane.

  14. In polling conducted in August, a majority of Americans?more than 57 percent?say reducing government spending will “mostly help” the economy. Just one in five believes cutting spending will “mostly harm” the economy.

    I’m missing something here – Why is it important what a majority of the respondents think about an issue that they know nothing about? (I’d include you & me & almost everyone we know in that same group.)

    1. “Why is it important what a majority of the respondents think about an issue that they know nothing about?”

      +1

      1. Well, so much for Democracy, then, eh Tony?

        1. Put me down for firmly believing that economic policy, like war strategy, should not be made by direct democracy.

          1. Whose hand is up your ass today? Not for fun….I mean to make your mouth move.

            1. Shorter Tony:

              If you didn’t go to a Team Blue-approved institution of higher learning, you’re incapable of understanding adult topics and should just shut the fuck up and agree with your betters.

              And don’t run with scissors.

              1. What would be the “shorter Mr FIFY”?

                Maybe “I read something about this therefore I am an expert.”

                1. Tony has said as much, more than once. He has a high disdain for regular people, not to mention his bigotry against straight people.

                  You new here?

    2. Because they’re going to vote next fall and their votes will in large part be based on the economy.

    3. I’m missing something here – Why is it important what a majority of the respondents think about an issue that they know nothing about?

      Now please listen to my diatribe on macro-economics and moral hazard on Federally-backed education loan policy.

  15. Technically, one could imagine Keynesian economics working like a photovoltaic solar energy system. The gov’t would play the role of the back-up batteries, storing excess power (wealth) during sunny (good economic) times and then releasing stored power (wealth) during the night (recessions). The results would be a steady power supply (economy).

    Such a system is simply not possible with a democratic gov’t, however.

    1. Such a system is simply not possible with a democratic gov’t, however.

      Fixed.

      It’s not possible, period. Because some small group of pointy-headed policy wonks have to decide where to put this vaunted ‘excess’ power when the lights go dim. Government is worse than awful at picking these winners and losers.

      1. Agreed. I thought about that later, and it’s simply not possible with humans at all.

        1. And the founding fathers knew this over 200 years ago, why have we forgotten it?

    2. Why not let the private sector create the back-up batteries? It would do so more efficiently and more reliably.

      Then again, why not let the free market be free to create as much wealth as possible. Even with economic cycles, people would still be better off.

      Afterall,

      W? [ 1 + cos( ? t ) ] > W?

      is true for all t if W? is sufficiently bigger than W?.

      Of course, if your goal is “income equality”, i.e. you think everyone being poor (except a tiny, privileged, politically connected class) is better than everyone being well off with some people being super rich, then this argument means nothing to you.

      1. Oops. Screwed up the formula, but I’m sure you get my point.

        1. Yeah, maybe W1 + C*cos(wt) > W2 (provided W1 – C > W2) is what you meant, and I agree with you, but I’m just playing devil’s advocate and seeing it from Keynes point of view.

          One argument against the “let the free market recessions happen” is that people’s acceptance of a standard of living tends to ratchet up with the economy. Witness the fact that a family of 4 living on $22,000/year is considered “poverty”, but relative to most of the rest of the world, that would be living like royalty.

      2. Why not let the private sector create the back-up batteries? It would do so more efficiently and more reliably.

        Agreed. The best “battery” is a thing called individual savings accounts but that is apparently expecting too much from our modern society to keep those batteries “charged”.

        1. Because we have become a “got to have it now” society every one has just spent until the point of no return. To me it seems that the only people who made out were the Banks, The Government and the Unions.

      3. But to Team Blue, the private sector’s only purpose is to generate revenue for the state.

        If they could find a way to eliminate that pesky middleman, they’d do it.

    3. Your error here is in suggesting that a fiat currency government can store up reserves of its own currency for future use. This idea has no traction, as that government can create an infinite supply of that currency at any time simply by spending it into existance, and in fact, all receipts by that government of its own currency cannot be stored, as they simply offset the liability incurred when that currency was initially spent into existance.

  16. I’d like to see the polling data and methods. This doesn’t seem like a sound poll to me. No transparency, no margin of error, no sample size, or simple random sample.

    Also, Ayn Rand owes about 100k to the Russian Government for her education.

    1. testing, testing

  17. Let me see if I have this correct. We are now suggesting that the determination of what is and is not correct macroeconomics will be made by a popularity contest conducted among a population in which 99% has never attended a single course in it?

    What am I missing?

  18. a third-party candidate who is economically conservative and socially liberal.

    Any why would this change anything if whoeveritis gets elected?

  19. thank you a lotsssssssssssssss

  20. thank you a lotsssssssssssssss

  21. I can’t understand why Reason is so ignorant of the actual science, of the problems with the IPCC, and of the level of corruption in the climate field.

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