One of the wonders of the Web is the degree to which it can – and does – keep the citizenry informed on the nation’s political outlook. Government 2.0 has the potential to re-Jeffersonize a political system that is too often disconnected from the people it purports to serve.
At first glance, Politify looks to be another great addition to the political web. It uses household data to calculate the amount of taxes and government benefits that one will pay and receive, respectively, under the economic platform of each presidential candidate – to determine “which candidate best serves our individual interests,” as the site puts it.
I’m of the view that more information is nearly always a good thing in the political realm. But something about Politify didn’t sit right with me.
A Twitter exchange with Politify founder Nikita Bier helped me crystallize my misgivings: while the data the site offers is informative, Politify reduces financial interests to rent-seeking – how much can I extract from the government and/or prevent the government from extracting from me? While voting according to one’s economic self-interest is perfectly rational and usually healthy, is that really an accurate equation for measuring one’s interests?
Rep. Paul Ryan (R-Wisc.) is fond of discussing the economic safety net’s long decline into a “hammock” – a stultifying force that lulls its “beneficiaries” into lives of complacency and dependence. Is that hammock in voters’ best financial interests?
Consider federal unemployment benefits: most economists agree that they tend to prolong joblessness. Paul Krugman, for instance, has written that such benefits “can lead to structural unemployment as an unintended side effect” because they “reduce a worker’s incentive to quickly find a new job.” Chief White House economist Alan Krueger agrees.
Since reducing those benefits tends to increase employment, is an official who does just that acting in the best interests of the unemployed? Politify would note the reduction in benefits paid, and potentially the increase in taxes, assuming the newly-employed individual is bumped into a higher bracket, and likely conclude that such a policy would not serve his financial interests, even if the policy resulted in full-time employment for that voter.
By default, Politify gives preference to government-derived income over privately-derived income in determining a politician’s effect on a voter’s wallet. Voters’ “financial interests” are synonymous with the amount of taxpayer money government gives them, and the amount of their money government allows them to keep. Income derived through non-political sources, but enabled by a federal policy, has no effect on the website’s measure of voters’ financial stake in each candidate.
Politify also does not take into account the downstream economic effects of the taxation or spending schemes its website measures. Under the site’s accounting of President Obama’s plan, for instance, proposed tax hikes on higher income earners do not affect lower-income earners, whose interests are measured solely according to the benefits they receive and the taxes they pay.
But because those tax hikes would ensnare an estimated 70 percent of manufacturing companies, they would have dramatic effects on economic growth, wages, employment, consumer spending, and a host of other measures of economic well being that Politify does not consider in its measurements.
Furthermore, there are a host of economic policies that don’t include transfer payments or taxes, but still have dramatic impacts on Americans’ well-being.
Environmental regulations, for instance, can increase energy prices, which in turn increase the prices for most consumer goods. Changes to the health care system can levy significant costs on individuals and businesses that dramatically affect Americans’ living standards.
From a large scale (declaration of war) to a small one (the construction of a road), federal policies can have a significant impact on the financial well-being of American voters that cannot be measured simply by direct payments to or from the federal government.
Politify is a useful service for determining the likely effect of a candidate’s platform on one’s tax payments and the benefits one receives from the government. But to extrapolate that data into a measure of general financial well-being is to ignore not only the range of (often unintended) economic consequences that federal tax policy and welfare programs produce, but also the litany of federal policies that are neither taxation schemes nor spending programs, but still affect Americans’ wallets every day.
Voters who define their financial interests as the “free stuff” they get through government will need look no further than Politify. But those who consider their economic interests to be something greater than the sum of government handouts and reductions in tax payments will not find an accurate picture of candidates’ likely effects on their bottom line.
