-

Recommended browser for this blog: Chrome

Follow Economystified on facebook
All posts by Dan Whalen,
Providence, RI (resume)

Thursday, March 8, 2012

"Is it WORTH it?"

            Election season is coming up!  The news cycles are about to be inundated with a slew of “unveilings;” of new public programs, financial plans, tax proposals, economic strategies and so on.

            And for every maneuver suggested, there’s sure to be a pundit on the other side of the aisle, eager for the opportunity to point out every flaw in it.

            When politicians and politicos knock each others economic plans or programming agendas, a certain set of canned attacks are commonly used.  You’ve heard them before, I’m sure:

            “Now is not the time for this!”

            “Times are tough, and sacrifices must be made…”

            “Is this what we want for our country?  For our children?”

            But there’s one cliché that I hear both from our leaders and in regular conversation that always intrigues me:

            “Is this measure (or plan, or program, or whatever) worth it?

            The implication is that the end goals the opposition is advocating are not “worth” the spending needed to see them happen.

            Of course, the logical follow up question would be, well how much should it cost?  If the price of completing the initiative was less, then would the opponents suddenly concede that the idea is “worth” pursuing?  Or would they find any price too high?

            If you think about it, the real question is: “What is it that the opponents are balking to?  The cost of the project…or the project itself?” 

If the cost of Obama’s healthcare or Bush’s homeland security was reduced, would their dejecters suddenly be on board with them?  Or is objecting to the cost just a sideways tactic for objecting for the program itself?

Sometimes you’ll see pundits cite some quantifiable result of adopting or rejecting a public service plan.  Some sort of ploy to show that there is an undeniable consequence of not letting the advocate have their way.  “If our schools aren’t improved, our economic competitiveness will falter, and our GDP will fall by $XX trillion.”  “If our health system is tightened up, American’s will keep $XX more of their wages away from insurance companies.”

In economics, we call these dollar amounts that stand to be gained from some other spending “ROI” or “return on investment.”  As in, the advocates of the program view the program as a strategic investment, something that will generate wealth or economic gain in the “long run” that exceeds the short term cost of enacting the plan.

They’ll claim that $1 trillion of government spending here will create X thousand jobs over there.  Or that $5 billion of sending over there will up our GDP $100 billion over here.

But there can be serious issues with this approach.  It relies heavily on estimates, predictions and interpretation.  Moreover: it’s simply unnecessary.  Some spending doesn’t generate revenue.  Some spending is not investment.  But I don’t think that means that it shouldn’t happen.

Look, some government programs and initiatives are expensive.  We need to tax and borrow to see them through.  We need to spend money to have them.  But that doesn’t mean we should just not do them.  They’re important.  And we value them as a societal whole.

            If I feel sick, it’s “economically” better for me to not see a doctor, and just hang out until I die.  I’ll save so much money in the long run!

            Want to drastically reduce you’re monthly grocery bill?  Here’s a great tip: starve to death.

            These strategies might make sense literally, arithmetically, on paper.  But would anyone do them?  Of course not!

            It’s expensive to provide for the common defense.  It’s expensive to educate an entire nation, and to care for its health.  It’s expensive to have courts, and to enforce laws and to regulate industries. 

            SO WHAT!?  If we don’t do these things, if we decide that they are simply not worth it, what kind of life are we leading? 

            For governments, just like cars, jewelry, diners, tools…the best don’t come for free.  So when you hear, in a Congressional budgeting debate, some one drop the line “this spending isn’t ‘worth it,’”ask yourself "does that even matter?"  Aren't somethings just worth having, if only just to have?

1 comment:

  1. I agree some things are priceless, depending on who you ask. Some people prize health, some prize education, some prize Biblical holiness.

    I think using "we" over-complicates the issue. First, "we", as in everyone NOT in Congress, don't choose how Congress spends money - so there is no moral dilemma for "us".

    Second, there is little "we value" as a "societal whole" enough that cost is no issue, to all of us. This is evident in the microcosm of Congress.

    Debates exist because congresspeople are individuals with their own priorities - vying for a common pool of funds. Congressman Sam wants free birth-control vending machines on every corner. He says, "If we don't control our population, what kind of life are we leading? We need to cut defense to make this a reality!"

    But Congresswoman Sue thinks defense is more important: "If we don't provide for the common defense, what kind of life are we leading? We can't allow Sam's measure to pass..." and so on.

    And poor Congressman Ed, who is trying to get welfare for Swiss immigrant clockworkers, is going to feel like a bag of potato chips in a flock of seagulls.

    Sam thinks the cost of his program is worth it. But as long as he must fight for money, then by definition, no one else's program is "worth it" to him - Sam wants that money for his #1 priority. Only when Sam has secured enough money for the vending machines will he consider his #2 priority, which might make Sue's #1 priority (defense) "worth it" to Sam.

    A forest does not decide it is worth growing leaves...

    ReplyDelete