Tonight, millions will tune in to the presidential debate. Most media outlets will focus on who won the debate — when what we need is a serious discussion about how each candidate’s policy ideas will shape the country if he wins November’s election.
It is clear that the election will center on the state of the economy. However, political rhetoric and the media’s coverage often eschew economic reasoning and evidence when discussing policy.
The Wharton Public Policy Initiative, established last month, addresses a similar problem. The basic idea behind the initiative is that policy makers should, whenever possible, benefit from the input of the best experts available. Policy — whether regarding health care, financial regulation or entitlement programs — is too important to be left to legislators alone.
The Public Policy Initiative has a message for all voters: it is dangerous to support an economic policy simply because it makes intuitive sense. We need to engage in a serious dialogue leading up to the election about what does and does not work from an empirical standpoint.
Just as pharmaceutical products must be thoroughly tested before they are widely available, we should rigorously evaluate an economic policy before it affects millions. However, policies are often selected by voters who have not been exposed to a discussion based on economic reasoning and evidence.
For Wharton professor Mark Duggan, the faculty director of the Public Policy Initiative, policy makers should strive to sort the ideas that sound good from the ideas that actually are good. Often, he says, our policies can be “penny-wise and pound-foolish.”
Many arguments espoused by politicians and the media are appealing but ultimately flawed. A common economic myth, for instance, is the notion that a government’s budget is the same as a household’s budget. Most economists reject this concept, but it is all too often invoked as a reason to support austerity measures that have hurt rather than helped the economic situation in the European Union.
Princeton’s Paul Krugman is one critic of austerity who has frequently combated this notion in his New York Times column. Consider a household that is in debt in a normal economy. Krugman notes that if members of this household save more, they will lower their debt.
But during a recession, if all households in an economy spend less and save more, everyone’s income goes down. This is because what I spend is another person’s income, and vice versa. When households collectively decrease their spending, this reduces the total income within an economy.
In these situations, the federal government has a role to play and should fill the void by spending.
If the government fails to fulfill this role, households decreasing their spending will also make it harder for every other household to repay its debt.
It’s difficult to clearly communicate economic issues to the typical voter, but this type of discussion is essential. Even though people disagree with some of the conclusions that Krugman draws, he succeeds in clearly explaining important economic issues.
It’s imperative that we discuss economic policy at a more substantive level. When politicians and the media don’t discuss the economic merits of a policy by consulting the best experts available, voters are left uniformed.
The decisions on economic issues that will be made after this election will affect Penn students and others of our generation the most. This election will impact our job prospects for the years to come and we are the ones who will have to pay for the national debt and increases in healthcare spending.
This election is not just a question of ideology. It’s a question of policy. And it’s time we change the way we talk about the economy.
Brian Collopy is a College junior from Washington, D.C. “A Modest Proposal” appears every other Tuesday. His email address is email@example.com Follow him brianc61.