Support for Biden's $1.9 trillion coronavirus relief package may not be as broad as it seems – it's all a matter of perspective
Government spending costing billions or trillions of dollars can seem abstract. Siri Stafford / DigitalVision via Getty Images
Congress is on the verge of spending $ 1.9 trillion to provide Americans with additional coronavirus relief, including $ 1,400 in direct payments and expanded unemployment benefits. Opinion polls show the bill also has strong support among Republican voters.
But what if you were told that this spending level is about $ 15,000 for every household in the US? Would it make you less likely to support it even if you liked its provisions?
We are accounting professors who study how the presentation of financial information affects individual judgments. Our recent work suggests that this would reduce most people's support for expense accounting.
Understand big numbers
In the Spring 2020 edition of Behavioral Science in Accounting, we published a study that examined whether individuals understand the large amount of government spending.
The federal government routinely spends millions, billions, and more recently trillions, but those numbers go well beyond what individuals encounter on a daily basis, which makes it difficult for most people - and probably lawmakers - to get their heads off to wrap them.
We hypothesized that presenting the cost of government spending per household would make these amounts easier for individuals to understand and assess.
In our study, we conducted an experiment in which people evaluated a hypothetical federal spending proposal that included provisions such as vocational training, unemployment benefits, and infrastructure spending. Half of those attending received a plan that would cost $ 718 million, while the other half saw the same proposal costing $ 718 billion. Participants were randomly provided with either the full cost of the proposal or the balance sheet per household. That is, $ 5,744 for the $ 718 billion version and $ 5.74 for the $ 718 million version.
We saw no difference in the amount of support expressed by people who saw the $ 718 million proposal compared to people who saw the $ 718 billion proposal, though it is 1000 times larger. But the people who saw the amount per household expressed significantly less support for the higher priced version. In addition, we then showed the per household printout to the participants given the totals and saw a similar decrease in support for the more expensive proposal.
We therefore concluded that the per-household presentation reduced the individual's cost of government spending.
Interestingly, although liberals were more likely to support the spending proposal than conservatives on average, both groups became more cost-sensitive when government spending was represented per household.
What it means
This is not to say that the U.S. should or shouldn't spend $ 1.9 trillion on coronavirus relief.
Our point is that it's important to make these big numbers available to voters so they can put the total cost in context and then see for themselves whether it's worth the expense. And it could mean that if told the cost per household for the $ 1.9 billion bill, voters would offer less support.
One caveat is that converting government spending per household can lead voters to mistakenly believe they are personally responsible for that amount. Most, if not all, of government funding comes from individual taxpayers and not all households pay the same share.
However, we also found that the participants were not more sensitive to costs because they felt personally liable, but because they simply had a better understanding of the amount of the expenses.
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This article was republished by The Conversation, a non-profit news site dedicated to sharing ideas from academic experts. It is written by: Aaron Saiewitz, University of Nevada, Las Vegas and M. David Piercey, University of Massachusetts, Amherst.
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The authors do not work for, or consult with, any of the companies or organizations that would benefit from this article. You have not disclosed any relevant affiliations beyond your academic appointment.
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