Friday, November 20, 2009

The Price Of Innumeracy

Jeebus H. Crispies:

I cannot believe this Rasmussen poll:

51 percent believe canceling the rest of the stimulus money would create more jobs.

That is insane.

It's one thing to say that canceling the rest of the stimulus money would help our deficit. That's arguable, even if I think it's dead wrong, since the best way to help our deficit is to put people back to work when demand is nonexistent so that they (1) receive taxable income and (2) spend that taxable income on products to help other people's taxable income. In our 2009 deficit, $300 billion came from lower tax receipts, $100 billion came from stimulus tax cuts and about $100 billion came from stimulus spending. One hundred billion. Blaming the January stimulus for the $1.4 trillion deficit like blaming a pack of Skittles for a cavity.

Sometimes, the Majority of Americans Are Really Stupid

Steve Benen blames the wrong form of stupidity for this one:

Chances are, it's not just one thing. Part of the confusion is likely the result of an electorate that doesn't quite understand the basics, and is therefore easily misled by the same people who got us in this mess. Part of it comes from a media that hasn't made much of an effort to explain the basics. And part of the problem has to be politicians -- one party believes Hoover was right about the Great Depression, and the other party is afraid to talk about how government spending and intervention prevented a wholesale economic collapse.

The Dangers Of Illiteracy

Yes, the Democrats are largely useless. I think there's a reason for that beyond corruption and spinelessness, though. I'll sum it up this way: if you don't know the difference between a million, a billion, and a trillion, you're part of the problem. This is about basic innumeracy - the inability to comprehend simple mathematics. America is really bad at it.

America, let me give you a crash course. See this chart?
Image credit: Afferent Input.

Yes, I've used it before. That's because it demonstrates one of the most profound economic truths of the last thirty years. Click on it to enlarge. It's a chart of real personal income in the United States from 1979 until 2006. Unless you're fabulously rich, you're not represented by either the purple or the turquoise lines. We're the lines that are going down. Going down is bad here. The people who are trying to sell you on the idea that a deficit is killing jobs are the ones who are responsible for the purple and turquoise lines going one way and all the other lines going the other.

If you don't understand what that means, or don't believe it, take a statistics course and get back to me.

And you'd better be able to tell me how many millions there are in a trillion.


Anonymous said...

Please read the link for a better appreciation of the complexity of the situation:

Cujo359 said...

Interesting article, that's for sure. The willingness of people to believe in a free market certainly requires more credulity than I've ever managed. I still think that basic innumeracy is a factor, though, because if you don't understand the numbers, you're likely to believe whatever is said by the most credible-sounding person. Typically, that's not a good way to form an opinion.