Congress, the deficit and the 'impossibility theorem'

March 22, 2011|By Thomas F. Schaller

Triplet brothers are having a blast at a water park late one afternoon and, despite pruned fingers, they don't want to leave. But it's getting late, and Dad says they must go in 15 minutes. Pick one of the superslides for one last ride of the day, dad instructs them.

Of the three big slides, Adam's favorite is the red one, followed by the green and yellow slides. Burt's fave is green, with yellow second and red last. And Chip loves yellow, followed by red and green. The boys can't separate because Dad's safety rule is they keep together everywhere in the park. The triplets must either reach agreement on a slide or miss out on their final run.

But which one?

Trouble is, if they voted, there'd be one vote each for the red, green and yellow slides. And if Dad made the boys vote on pairwise choices, there would be two votes for red over green (Adam and Chip outvoting Burt), but also two votes green over yellow (Adam and Burt over Chip), and two for yellow over red (Burt and Chip over Adam). As a trio, the boys "prefer" red over green, green over yellow — but yellow over red again.

The boys are paralyzed by what's know as a "majority voting cycle," a concept upon which economist Kenneth Arrow expounded to develop his "impossibility theorem" and become the youngest winner of the Nobel Prize for economics, in 1972.

In real-world politics, similar cycles also arise, and they tend to create public stalemate, instability or even chaos.

Imagine, for example, that the same young father of triplets surveyed his three surviving grandparents — Ana, Bud and Cal — about how to deal with Medicare growth and rising deficits. Ana may prefer cutting the deficit, even if it means curbing Medicare spending; Bud may want cut the deficit but at the expense of programs other than Medicare; and Cal may prefer to preserve Medicare even if it causes deficits to rise. Substitute their first preferences and (unstated) secondary and tertiary preferences for their great-grandsons' favorite waterpark slides, and a similar cycle emerges.

Of course, in real-world politics, leaders are supposed to be the responsible "parents." They can end the paralysis by either persuading people to change their views or making tough decisions that upset somebody.

But politicians typically cave. This past November, Republicans promised both to rein in federal spending and to stop President Barack Obama's supposed threats to cut $500 billion from Medicare. Then the newly elected, tea party-inspired Republicans pledged to cut a mere $100 billion from the federal budget. After veteran Republicans who run the House pared that figure down, the package of proposed cuts fell to just $61 billion.

In a federal budget of $3.7 trillion, that's a scant 1.6 percent. The growth in Medicare and defense spending — two GOP untouchables — would more than exceed those savings.

Why are the supposed deficit hawks failing? A Pew Center study released last month provides a partial answer. When Americans were asked which among 18 federal program areas they would cut, there was a plurality for paring only one: "aid to the world's needy." In 12 areas, a plurality wanted to keep spending about the same, and in the remaining five areas a plurality (if not majority) of Americans want to increase spending — including on public schools. (Take that, Governor Walker.)

We want less spending, but we want spending on almost everything to stay the same or even increase. Sure, some of us would like less spending on education and more on defense, and others the reverse.

But overall, pluralities if not majorities of Americans want to keep federal spending at current or even higher levels. Despite our deficit worries, taxpayers and voters are paralyzed by their spending priorities. We want to ride all three waterslides, no matter what dad says.

Of course, rather than standing firm behind his original 15-minute departure schedule, dad could just appease his sons by letting them stay an extra 45 minutes so they make one last dash down all three slides. Just like parents who seek their kids' approval rather than their assent, are we really surprised when politicians give the voters exactly want we want, too?

Thomas F. Schaller teaches political science at UMBC. His column appears every other Wednesday in The Sun. His e-mail is schaller67@gmail.com.

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