Bad Marketing for “Good” Programs

Ezra Klein highlights a strange fact about U.S. government programs – most of the biggest ones work so well nobody realizes they are getting government hand outs.

“Then there’s what Mettler calls “the submerged state.” These policies are mostly, though not exclusively, tax breaks. They include the much-beloved home-mortgage interest deduction and the tax exclusion for employer-provided health care. Recipients of these policies — and there are tens of millions of them — are rarely cognizant that they’re benefiting from a government program.

But they are. “Indirect social policies offer benefits that are comparable to direct social benefits both in their purposes and in their costs,” Mettler and Koch write. “Both are targeted to specific groups of people, aimed to reward some kind of activity or some class of persons whom policymakers deem worthy of public support. From an accounting perspective, as well, both types have the same effect: They impose costs on the federal budget, whether incurred through fiscal obligations or lost revenues.”

The costs are significant. Huge, in fact. Tax expenditures now cost the federal government $1 trillion annually — more than Medicare and Medicaid combined. And they’re regressive.

There is also a pattern to these programs: The more a government social program benefits wealthier Americans, the less obtrusive it is. We design policies for the poor in ways that make it hard to escape the knowledge that the government is providing help. But richer Americans rely on programs that are “submerged.” The Tax Policy Center estimates that eliminating all individual-income tax expenditures would raise levies on the bottom 20 percent by $931. For the top 1 percent, the tax increase would be almost $280,000. (Notably, both President Barack Obama and Mitt Romney have talked about cutting back on tax expenditures for the wealthy, but neither has provided details.) Even so, many middle class and wealthy beneficiaries have no idea that they’re receiving any government assistance at all.

I am decently liberal, and this is the kind of thing which just infuriates me. We’re helping out nearly every resident of the United States in massive direct cash transfers, and nobody knows about it.

How is this possible?

Even if the program is questionable – even if it’s horrible – the government should let people know what it’s doing. Spending .1% on marketing would be a big help to make programs more known by people, so they know they are getting help from the government, just like the bums they feel are ripping off the system.

You’d think this would be low hanging fruit for the libs and Dems to exploit, yet here we are.


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Erik V
4 years 10 months ago

Most (wonky) conservatives would be in favor of eliminating almost all tax expenditures in exchange for lower rates even if it made the tax code more progressive. It’s not hypocritical to hate Medicare or SS even though you use them. These programs are compulsory. I hate SS because I can invest for my own retirement at a much higher rate of return. But since I’ve been forced to pay into the system, then damn right I’m going to collect my check when the day comes. I find it comical and sad how liberals doll out benefits that people don’t want, then tie themselves in knots to try to convince people to love the government.

Roughly 80% of govt spending can be summarized as follows:

SS-High and regressive taxes to fund meager benefits
Medicare/Medicaid- Part of the most expensive and inefficient HC system in the world
Income Support- actual welfare, only benefits the poor, perfectly understandable why middle and upper class people wouldn’t love this area
Defense- Squander billions on bloated contracts to defense industry for things we don’t need, while real threats are inadequately defensed against

We need to reallocate spending from transfer payments to public investment, eliminate tax expenditures, cut taxes and get about another trillion of fiscal stimulus going

4 years 10 months ago

As a liberal who knows how conservatives think – there is no way they would accept a tax deduction as a gov program. They see it as their money to begin with. Klein’s article makes some good points, but trying to lump in a tax deduction with food stamps means most conservatives will discredit the entire article and research.

Dunce Cap Aficionado
4 years 10 months ago

Agree here. Hell, I’m an independent and I agree with them on this, “They see it as their money to begin with” but not on it not being a ‘gov program’.

4 years 10 months ago

Re: better marketing
Step 1, agree on a name for it.

“Then there’s what Mettler calls “the submerged state.” These policies are mostly, though not exclusively, tax breaks.”
“The Hidden Welfare State is a term coined by Christopher Howard, professor of government at the College of William and Mary, to refer to tax expenditures with social welfare objectives that are often not included in discussions about the U.S. welfare state…

Now its possible Mettler defines this as
Submerged State = Hidden Welfare State + Corporate Welfare,
but just from how Ezra described it, it sounds more like
Submerged State = Hidden Welfare State.

Tom Hickey
4 years 10 months ago

There are basically four types of public expenditure for public purpose: national defense, domestic welfare, interest payments on the govts, and foreign aid.

Really all government action is related to “welfare” in the broad sense used in political science and economics — and in the Preamble.

The concept of “welfare state” is rightist propaganda about social programs the right opposes. In this case it operates by changing the the meaning and emotional charge of key terminology to gain advantage one’s ideology and interests.

4 years 10 months ago

They should take that sum (well, most of it anyway, the deductions for charitable donations and mortgage interest aren’t going anywhere) and use it to fund a Negative Income Tax.