Monday, March 12, 2012

Statistics and light posts

There is an old joke about people using facts like a drunk uses a light post - for support, not illumination.  In the February 23, 2012 Republican debate Rick Santorum made a statement that is a perfect example of how statistics can be used the same way.

The former Senator stated that the defense spending was not the problem with the Federal deficit, that entitlements were the problem, because only 16% of Federal spending was on defense.  That is so twisted it made my jaw drop.  This is a former Senator - is he cynically manufacturing misleading statistics to support his political position, or does he really not get it?

Here is what he is either hiding or ignoring - Congress has borrowed money from working people for decades to fund tax cuts for wealthy people.

Here are the facts:  There are two main sources of tax revenue for the United States.  Payroll taxes and Income taxes.   Payroll taxes are what is taken out of all of our paychecks every month for social security, medicare, unemployment insurance and other similar programs.  In other words, all those programs that actually impact ordinary working citizens are funded by payroll taxes.  The bulk of the payroll tax is to cover Social Security and Medicare.  To my knowledge in my lifetime payroll tax income has always exceeded the expenditures on these programs and in fact generally run big surpluses. (I am not sure about how unemployment insurance taxes and expenditures stack up over time)

These payroll tax funds were supposed to have been trust funds - the money could not be used for other purposes, but Congress started raiding the trusts funds years ago, in large part to close the big holes in the Federal budget blown by tax cuts on income taxes.  Defense spending has for decades equaled about 50% of income tax revenue.  The remaining 50% pays for all the other things the Federal Government does.  Basically for decades the Congress has not imposed enough income tax to cover the costs of government and they have covered it up by using payroll tax money, or running a deficit.  So Senator Santorum's 16% figure was arrived at by looking at the total Federal budget, and then laying the blame for the deficit on the part of the budget that has actually paid for itself over the years.

I don't know which scenario is more worrisome.  That former Senator Santorum doesn't understand these distinctions, or that he is quite comfortable manufacturing misleading statistics to make a misleading debating point.

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