Austere Publics: Why Did the U.S. Public Become More Fiscally Conservative after the Great Recession?

In the midst of the global financial crisis, many national governments turned to expansionary fiscal policy in an effort to ward off deeper recession, not least the United States. But the Keynesian experiment was short lived, as stimulus spending and extended unemployment insurance succumbed to austerity imposed at the threat “fiscal cliffs” and “debt ceilings.” This article begins with a puzzling observation: Even as the federal budget deficit shrank between 2009 and 2012, the American public's preoccupation with the deficit reached an apex, displacing unemployment as the “most important problem facing the United States” in opinion polls. In other words, widespread anxiety over budget deficits and debt competed with the public's desire for the expansionary policies that would constitute a Polanyian countermovement. Why did the public become so concerned with fiscal balance at a time when so many were still mired in recession? Combining five years of U.S. public opinion data with political, economic, and media time series, I show that conservative social movements and elites focused the public's attention on budget deficits and debt. At first, fiscal anxiety prevailed mostly among conservative partisans, but this anxiety transcended party lines as policy elites constructed a “fiscal crisis” in 2011 and 2012. By early 2013, the confluence of elite, social movement, and public opinion anxiety over fiscal issues effectively closed off further use of expansionary fiscal policy for economic recovery. Although we should be cautious extrapolating from opinion data, I conclude with implications of elite agenda-setting and mass preferences on the limits to countermovement in the domain of fiscal policy. Namely, reactionary elites can appeal to the public's economic anxieties to undermine support for expansionary policy even in conditions of deep recession.