You are using an outdated browser.
Please upgrade your browser
and improve your visit to our site.
Skip Navigation

Categorical Thinking And The Deficit

Judith Shulevitz's article in the print magazine about salt is well worth reading on its own. But I was struck by this passage, about the difficulty of making consumers understand the drawbacks of excessive salt without putting them off salt altogether:

Reeducation programs focused on a single ingredient almost always confuse people. No matter how careful education campaigns are to stress that salt is essential to life in small doses, some Americans will demonize the condiment, rather than its industrial overuse. Food psychologist Paul Rozin has shown that a substantial minority of test subjects, regardless of class or educational level, respond to a confusing barrage of nutritional information with “a monotonic mind,” “categorical thinking,” and the fear of contagion. That is, they reason that, if a lot of something is bad for you, a little of it must be too.

This, of course, is the same problem we have with deficits. Small deficits are usually fine, though it can sometimes be a good idea to run a balanced budget or even a surplus. Very high deficits are terrible, except during an extremely severe recession, in which case they're essential. Unfortunately the public and large chunks of the Washington establishment suffer from categorical thinking:

“We have to stop spending money we don’t have,” as Jim Cooper, a House member from Tennessee, said the other day.

When Congressional leaders announced plans for a new $200 billion jobs bill recently, Mr. Cooper and other centrist House Democrats saw a chance to do something tangible. Only about a third of the bill’s cost would have been paid, by closing tax loopholes for investment managers and overseas businesses. The remaining $134 billion would have been added to the deficit. In response, the centrists said no and forced the leaders to cut the bill’s spending nearly in half.

As David Leonhardt explains in the article excerpted above, the "fiscally conservative" Democrats are revolting against a bill that would push fiscal policy in a sensible direction. In the short run, it would drive up the deficit through temporary spending and tax cuts. In the long run, it would hold it down by permanently closing tax loopholes. Apparently, though, the notion that it makes sense to increase the deficit now while reducing it later is too complicated for a lot of elected officials to grasp.