What does the $16 muffin really mean?

$600 hammer, step aside. The media has been abuzz with the story that the Department of Justice paid $16 apiece for muffins eaten at one department-sponsored conference. The Washington Post story on the costs paid for food service got far more comments on the paper’s website and tweets than President Obama’s speech around the same time to the General Assembly on Israel and Palestine.

Clearly this story makes great copy. But I have to ask two questions. First, is it true as an individual anecdote? Second, is it helpful to efforts to get the nation’s fiscal house in order?

On the first question, I will confess I am not a muffin expert. However, I have, over 30 years as a public management professor, frequently examined similar claims about outrageous government waste (and eaten several muffins). These claims turn out to be misleading, incomplete, and downright mistaken.

About 25 years ago I examined 10 claims about egregious government waste highlighted in the press release of the Reagan-era Grace Commission to illustrate their findings. Not one of the cases was correct as stated. (In one case, the commission misplaced a decimal point, inflating the purported government cost tenfold.) In the case of the $16 muffins, it appears that perhaps the hotels are providing the actual function rooms at no separate charge, and baking (so to speak) the cost of the room into the item charge for the refreshments.

However, there is a much broader issue than muffins. The fact is that the public has a bizarrely inflated idea of the role these kinds of examples of waste (or alleged waste) play in our fiscal problems. In a survey a number of years ago, the public on average believed that $52 out of every $100 in social security expenditures went to administrative costs. The real figure at the time of the survey was $1.30. (It's probably lower today.) The public is frequently asked what percentage of the federal budget goes to foreign aid. On average, people think it is 25 percent. The real figure is 1 percent.

This kind of misunderstanding has consequences. With due respect to the dysfunctionality of our political system, a fundamental reason it is so difficult to deal with our long-term fiscal woes is that the American people are not convinced we need either benefit cuts or tax increases to deal with the problem -- they have the illusion we can eliminate the deficit if only we can stop bureaucrats from gorging on $16 muffins. A lot of what the politicians are doing is to respond to that popular delusion.

So the most damaging myth -- nurtured by the muffin madness -- is that we can solve our fiscal crisis without doing some unpleasant things.