The Peterson Foundation's Fiscal Nonsense Index

WASHINGTON, DC - MAY 25:  Ambassador Peter G. Peterson delivers opening remarks during the Peter G. Peterson Foundation 2011
WASHINGTON, DC - MAY 25: Ambassador Peter G. Peterson delivers opening remarks during the Peter G. Peterson Foundation 2011 Fiscal Summit at the Mellon Auditorium May 25, 2011 in Washington, DC. Peterson said the current federal fiscal trajectory is unsustainable and introduced his 'Soultions Initiative,' a combination of ideas and plans from several high-profile think tanks. (Photo by Chip Somodevilla/Getty Images)

The Peter Peterson Foundation has released its second monthly "Fiscal Confidence Index." It's worth looking at closely as a case study in how polling data can be used selectively and manipulatively -- and as a broader example of what's wrong with today's narrow, ill-informed debate over fiscal policy.

Let's start with the flawed construction of the index. It asks -- and plans to keep asking, monthly -- people to respond to six questions that measure their level of concern about the national debt, whether this should be a national priority and whether they are optimistic or pessimistic about whether the United States will be able to make progress on the national debt.

Not surprisingly, especially in the wake of the Fiscal Cliff episode, most respondents answer that yes, they are increasingly concerned about the debt; yes, they think tackling the debt should be a national priority; and yes, they think this problem will get worse.

The Fiscal Confidence Index gives the impression that the American public is urgently concerned about the national debt, and wants deficit reduction to be a top priority -- if not the top priority.

Of course, though, that impression is contradicted by a large body of other opinion surveys and exit polls taken over the past two years. While, yes, some polling has found that wealthy Americans want deficit reduction to be a top priority, this view is not shared by most Americans.

When Americans are asked in an open-ended way about the priorities of Washington, debt does not make the top of the list. By far the largest survey of Americans in recent months was the national exit poll conducted on Election Day in November.

Voters were asked about priorities the way they should be asked: In an open-ended manner, in contrast to the suggestive framing of the Fiscal Confidence Index. The exit poll found that 59 percent of respondents said the economy was the most important problem facing the country; 18 percent said healthcare was the biggest problem; and 15 percent said the deficit was the biggest problem.

You'd never know from the Fiscal Confidence Index that the public views reducing deficits as far less important than fixing the economy. And it hard not to suspect that the polling questions behind the Index are precisely designed to obscure that very important point -- since respondents aren't asked an open-ended priority question or given a chance to choose between debt reduction and other priorities.

The 2012 exit poll was no one-off finding, either.

A poll taken earlier this month found Americans more focused on the economy than deficit reduction by a two-to-one margin. Most polls throughout 2011 and 2012 found the public to be focused on jobs and the economy over the deficit by two-to-one margins or more. A CBS News/New York Times poll in September 2012 found that 37 percent of respondents named jobs and the economy as the top issue that they would vote on in this election and just 4 percent named the budget deficit and national debt. A Bloomberg poll the same month found 43 percent identifying jobs and the economy as the most important issue facing the country with 14 percent saying the federal deficit. (See all poll findings on the Priorities page of Polls by the Pew Research Center have found similar trends, as shown in this table.

The Global Strategy Group, which undertakes the polling for the Fiscal Confidence Index, should be ashamed of its part in developing a survey with such a strong response bias that it contradicts everything we know about public opinion on deficits and the debt. Forget the polls of recent years. The national debt has never been an urgent concern of ordinary voters and deficit reduction has never been a top priority. Every pollster knows this, including -- presumably -- the very sharp folks at the Global Strategy Group, like research director Nick Gourevitch. The client-pleasing hack job here is another example of the negative influence of Pete Peterson's huge fortune in the fiscal policy debate -- money sprinkled around so generously that it can tempt even smart people to say stupid things.

Beyond offering a misleading snapshot of public opinion, the Fiscal Confidence Index illustrates a deeper problem with the fiscal policy debate. Which is that the public lacks knowledge of this complicated issue and their views are very influenced by the political leaders and policy voices with the largest megaphones -- which, in recent years, have been deficit hawks.

What's striking is that even in the face of endless debt panic messages, the public has continued to prioritize job creation over deficit reduction. Which, it so happens, is the view held by numerous economists who argue that stimulating job creation now through deficit spending is the best way to reduce national debt in the long-term. Europe is finding out the hard way what happens when deficit hawks overrule both economic common sense and public opinion.

It's safe to say that Americans would be even less worried about the deficit if we had a more balanced and informed debate. For example, my guess is that most Americans don't know that the U.S. spends less on interest payments on the national debt as a percent of GDP today than we did in 1980. Or that ten years from now, even after a decade of more deficit spending, interest payments as a percent of GDP will rise only to rates that were typical in the 1980s and 1990s. Even top political leaders and pundits, who warn ominously about a future debt crisis, don't seem to realize that all signs point to an ever-rising tide of cheap money globally in coming decades as the middle class in emerging nations sock away more savings and China, India, Japan and other exporters continue to build up huge account surpluses. There is every reason to believe that the borrowing costs of the U.S. government, now at a historic low, will remain low for years to come in this environment.

Of course, also, most Americans don't know the more elementary fact that future deficits are driven largely by projected rising healthcare costs and nothing is more important to stabilizing our debt-to-GDP ratio in coming decades than controlling healthcare costs. (As opposed, say, to cutting foreign aid, which many Americans think makes up a far larger percentage of the budget than it actually does.)

Look, deficit hawks make some good points and I've expressed my own concerns about rising debt. But there is another side of the deficit debate that doesn't get nearly as much air time as the debt panic messages -- about how stimulus today can produce lower deficits tomorrow, about low borrowing costs in an age of cheap money and the all-important role of healthcare.

The public already prioritizes job creation over deficit reduction by large margins. In a debate with more facts and less noise, they'd lean even more in this direction. The Peterson's Fiscal Confidence Index, alas, is just more noise.