Americans Reject Keynesian Economics

Friday, February 05, 2010

Richard Nixon once said, “We’re all Keynesians now.” But that was a long time ago, and it’s certainly not the case anymore (if it ever was).

While influential 20th Century economist John Maynard Keynes would say it’s best to increase deficit spending in tough economic times, only 11% of American adults agree and think the nation needs to increase its deficit spending at this time. A new Rasmussen Reports national telephone survey finds that 70% disagree and say it would be better to cut the deficit.

In fact, 59% think Keynes had it backwards and that increasing the deficit at this time would hurt the economy rather than help.

To help the economy, most Americans (56%) believe that cutting the deficit is the way to go.

Eighty-three percent (83%) of Americans, in fact, say the size of the federal budget deficit is due more to the unwillingness of politicians to cut government spending than to the reluctance of taxpayers to pay more in taxes.

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Rejection of Keynesian economics is found across demographic and partisan lines. Republicans and those not affiliated with either major party overwhelmingly reject the notion that increasing the deficit is the right prescription in difficult economic times. Among Democrats, 21% agree with the Keynesian approach, and 47% do not.

Investors reject deficit spending even more strongly than non-investors.

Of course, not all deficits are created equal. Forty-nine percent (49%) of the nation’s voters believe it’s more important to cut spending than to reduce the deficit. Polling released earlier this week shows a similar attitude as voters prefer lower taxes and deficits to higher taxes and a balanced budget.

However, all polling on federal spending and deficits must be viewed with the recognition that only 35% of voters realize that the majority of federal spending goes to just defense, Social Security and Medicare.

"These figures highlight a massive failure of leadership from both Republicans and Democrats among the nation’s political elite,” says Scott Rasmussen, president of Rasmussen Reports. “Given the amount of political chatter about the budget in recent years, it is almost beyond comprehension that neither party has seen fit to highlight the basics so that the American people can make reasoned choices on the fundamental issues before them.”

The gap between policy makers and the American people is a key theme in Rasmussen’s new book, In Search of Self-Governance.

Pat Caddell, pollster for President Jimmy Carter and others, says that “Rasmussen unmasks the new fault line of our democracy: Mainstream America rising to reassert the supremacy of their sacred right of self governance over a failed Political Class grimly determined to preserve the primacy of their prerogatives of power. With calm reason Rasmussen lays out the contours of the struggle upon which may hang the ultimate fate of our American Experiment.” In Search of Self-Governance is available at Amazon.com.