It’s very fashionable in some circles to call for reductions in government intervention these days. Let people stand on their own two feet, we are told. An interesting article in the NYT suggests that people don’t fully understand the role of the government in providing benefits. Krugman cites US research showing that:
…44 percent of Social Security recipients, 43 percent of those receiving unemployment benefits, and 40 percent of those on Medicare say that they “have not used a government program.”
I don’t know if the results would be similar for NZ: perhaps it depends on how the benefits are delivered and whether a private firm provides them. However, it seems pertinent at a time when the government is focused on reducing the costs of long-term unemployment, even as our healthcare and superannuation expenses are the major fiscal risks for the government. Do voters really understand the fiscal transfers that are occurring and where the government puts the money?
If you’re interested in who receives what benefit from the government then it’s worth having a look at the latest Treasury work on fiscal incidence.