The Submerged State

Every once in a while, I read something that sparks an epiphany–usually, it’s the sort of “aha” moment that is followed by “well…DUH. I should have seen that before now.”

I’ve just begun reading a book by Suzanne Mettler titled The Submerged State, and I’ve had just such a moment.

Mettler’s book focuses upon the nature of government social welfare programs in the United States, and the fact that most of them are “submerged”–accomplished through tax credits and other incentives to the private sector, making them effectively invisible to most Americans. As she says, the policies of the submerged state obscure the role of government and exaggerate that of the market, leaving citizens unaware of how power really operates.

Mettler defines the submerged state as the “conglomeration of federal policies that function by providing incentives, subsidies, or payments to private organizations or households to encourage or reimburse them for conducting activities deemed to serve a public purpose.”

Mettler published the book during the waning days of the Obama administration, and she attributes much of the resistance to Obama’s agenda–and the accusations that he was trying to enlarge the role of government– to the widespread lack of understanding of what government already does, how it does it, and who it benefits.

The recipients of the bulk of government’s social benefits (aka “welfare programs”), as she points out, are disproportionately higher income Americans. Take the home mortgage exemption, for one example. Not only do higher-income taxpayers benefit more than those with smaller mortgages and lower incomes, but a significant number of low-income Americans don’t have enough deductions to itemize, and thus must forego the deduction entirely.

Much of my earlier academic research focused on so-called “privatization,” which in the U.S. means “contracting out”–the practice of government delivering services through a for-profit or non-profit surrogate. There are plenty of documented problems with the wholesale adoption of this practice (sometimes it makes sense, but all too often it is more costly and less accountable than doing the government’s business through public employees), but one problem that is rarely noted comes from the inevitable lack of transparency. People receiving government services frequently don’t realize that it is the government that is providing those services.

I’m just at the first chapter of Mettler’s book, so I don’t yet know whether she includes another consequence–one that is particularly corrosive to civic unity. When people don’t recognize that they are receiving benefits from government programs, because those programs are “submerged,” they are prone to look unfavorably at the more public programs that benefit other people.

I’m sure I’m not the only person to notice that the widespread animus toward “welfare” (aka programs to assist the poor) is rarely invoked in discussions about Social Security and Medicare. (And no, those programs are not “insurance” as that term is commonly understood.)The same phenomenon is at work in accusations that the poor don’t pay taxes; to many Americans, “taxes” means income taxes–not the sales taxes, gasoline taxes, property taxes and payroll taxes that everyone must pay and that constitute a significant portion of overall tax collections.

When a burden or benefit is universal, it elicits a different response.

A significant amount of resentment is generated when people think that other people are getting benefits that they don’t get, and that were paid for by “their” tax dollars. If they were aware of the extent to which they themselves are the beneficiaries of taxpayer largesse, it might ameliorate some of that resentment.

I’m looking forward to reading the rest of this book–and wondering why in the world I didn’t see the nefarious consequences of “submerged” programs before this.