How Political Fiction Is Twisting Economic Reality

Source: Thinkstock

Source: Thinkstock

New insight into just what exactly Americans know about where their tax dollars are spent does not inspire a lot of confidence. In fact, it appears that Americans are completely clueless for the most part.

The results of a recent Pew Research News IQ Quiz have been released, and it shows that Americans are under the impression that the government spends a whole lot more on foreign aid handouts to other countries than it does on programs like Social Security. The quiz, which is meant to give researchers insight into the general public’s awareness about a variety of facts in the news, as well as their own government, can still be taken on the Pew site.

Some key findings show that around 75% of Americans can correctly identify the current federal minimum wage, less than half know what the Common Core educational standards are, and less than 75% of respondents can correctly name the current chair of the Federal Reserve.

It’s perfectly understandable, if not expected, that Americans didn’t ace the quiz, but the most glaring finding was the fact that only 20% of those who took the quiz knew that the government spends more money on Social Security than it does on foreign aid.

Pew results

The Washington Post also picked up on this interesting nugget from the findings and dug into the results a little further. Respondents were asked which government program is the most costly to U.S. taxpayers and had the option of choosing between foreign aid, interest on debt, Social Security, and transportation. Of course, the answer is Social Security, by a long shot. But only 20% of respondents went with that answer, as 33% answered foreign aid, and 26% went with interest on debt.

For comparison, the U.S. spends 17 times the amount on Social Security than it does on foreign aid, with Social Security costs alone totaling more than $770 billion.

So, what does this say about the average American’s view on government spending? Obviously, after the last recession there was plenty of blowback from groups like the Tea Party asking for reductions in spending, but if the results of this quiz provide any insight, it seems that people generally are completely out of the loop as to the facts.

The question is, how do people become so misinformed on something that is, by and large, fairly transparent? The government publishes spending figures and a budget every year, and it’s quite easy to find where the majority of taxpayer money is going. So how do people get the idea that spending on foreign aid — which comprises less than 1% of the federal budget — somehow eclipses Social Security spending, which, when coupled with Medicare, makes up 41%?

The answer isn’t clear-cut, but can likely be traced to politicians and media members trumpeting up government spending issues. For example, there was a strong push to defund PBS and NPR in order to curb government spending, which many people agreed with. The truth was, the government spent $445 million on both in 2012, which comprised 0.014% of the federal budget. It was essentially nothing more than a stunt, but it managed to get people rallied up regardless.

In actuality, government spending is almost completely dominated by Social Security, Medicare/Medicaid, and defense. Federal spending in 2013 totaled up to roughly $3.5 trillion, most of which being funneled into the aforementioned categories. Of course, there is absolutely a need for the government to cut wasteful spending, and to reduce the national debt. These are problems that end up having negative economic effects, and need to be addressed.

Although there is little the average American can do to put an end to wasteful spending, it is possible to bone up on where tax dollars are actually being spent. The results from the Pew Research quiz are eye-opening, and show a great rift between how Americans view government spending and the reality of the situation.

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