The “Submerged” State

There is an interesting piece in today’s NYT by political scientist Suzanne Mettler. The basic argument is relatively straightforward. Americans dislike government because they fail to understand how greatly it benefits them. This is partially a story of ideology, partly a story of policy design. The first point is relatively simple. On the last point, the piece is referring to design issues that allow beneficiaries to receive their benefits through third party providers, thereby obscuring the source (and explaining how one might carry a placard telling the government to keep its hands off of Medicare). Design issues also arise in what Chris Howard has referred to as the “invisible welfare state,” or what Mettler describes as the “submerged  state,” i.e., a state that executes functions via tax expenditures. Citing the examples of the mortgage interest deduction or the tax treatment of employer-provided health care, the author notes that such policies leave “beneficiaries with the false impression that their economic security was owed merely to their own efforts.”

The submerged state obscures the role of government and exaggerates that of the market. It leaves citizens unaware of the source of programs and unable to form meaningful opinions about them.

The solution: make the benefits of the “submerged” state more visible.

I am a great fan of transparency. It is my suspicion, however, that if citizens looked beyond the treatment of their mortgage interest, health care, and church contributions, they would quickly lose enthusiasm for the submerged state.  This same state uses the same means to provide countless billions in corporate welfare to transfer-seekers thereby tilting the competitive field to benefit those who have most effectively purchases access. One should not be surprised that the majority of the benefits accrue to the top quintile.

I might be wrong, but I am not certain that full transparency would make the submerged state far more popular. It might, in fact, have the opposite effect.

 

6 thoughts on “The “Submerged” State

  1. Then again it is often the submerged state that, for instance with its bank regulations designed to avoid useful risk-taking, like lending to small businesses and entrepreneurs, and to promote risk-adverseness even if useless and dangerous, like lending to the government and triple-A rated, which is responsible for the whole nation submerging.

  2. Well put. In addition to student financial aid, those are the only topics she covers in the book. And as we’ve seen with welfare policy (TANF versus EITC), sometime the submerged state benefits more marginalized groups which are often the target of scapegoating.

  3. Thinking broadly about government policies that provide benefits, it is not clear to me that politicians would intentionally design them in such a way as to obscure their own responsibility for them. To the contrary, it seems much more likely that they would design programs systematically to exaggerate the government’s responsibility for the benefits received.

  4. By Mettler’s reasoning people would appreciate and support the mafia if they only appreciated the valuable benefits it provides. A strong mafia controls and regulates vice. It provides jobs and income to certain downtrodden and mal-affected members of our society. It keeps petty criminals under control and punishes them when they transcend the boundaries of what is acceptable. If the mafia were more transparent about these valuable services, people might not be quite so critical of it.

  5. I forgot to add that in certain locales, for a fee, the mafia will protect you from violence and wrongdoers. Unlike taxes, this fee is sometimes negotiable.

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