For Immediate Release: June 28, 2010
Contact: Alan Barber, (202) 293-5380 x115
Washington, D.C.- The Center for Economic and Policy Research (CEPR) conducted a poll of people leaving the AmericaSpeaks 21st Century Town Meeting sessions on June 26th. The poll of 74 participants revealed a surprising lack of knowledge among people who had just sat through a 6.5 hour-long discussion of the budget.
For example, the vast majority had no idea how large the budget deficit had been in the years just before the recession sent it soaring. 84.2 percent believed that the country had large budget deficits (greater than 2.0 percent of GDP) just prior to the recession began at the end of 2007. Only 10.5 percent realized that the deficit was relatively small (1.9 percent of GDP in 2006 and 1.3 percent in 2007) in the years just before the downturn. Fully 48.7 percent answered that the deficit was more than 5.0 percent in the years just before the downturn, which would imply a very large deficit.
The participants also had little understanding of the underlying course of the economy. Almost half (46.7 percent) answered that average wages would be the same or lower in 2040 than they are today. (The Congressional Budget Office (CBO) projects that real wages will be on average 38.8 percent higher in 2040.) The growth path of average wages would likely have been an important piece of background information in considering some measures, such as a phased increase in the Social Security tax.
Participants were better informed on the problem of health care in the United States. Eighty two percent correctly answered that health care costs much more in the United States than in Canada and Western European.
Participants were not as well informed about the health of the Social Security program. Only 31.1 percent correctly answered that the program could pay benefits for more than 25 years even if no changes are made. 23.0 percent thought that the program would first run short of money in less than 15 years. (The Social Security trustees project that the program will be able to pay all scheduled benefits for the next 27 years while CBO projects it can pay all benefits for the next 33 years.)
This lack of knowledge on key issues raises questions about the usefulness of the exercise. It is striking that people would have such a long period of time to devote to learning about and discussing the country's budget and economic problems and yet were still seriously misinformed on several key issues. It appears that this effort was not very successful in educating the participants.