States Visited

Friday, February 20, 2009

Chasing the Impossible...

I haven't really thought this through but it popped into my head while eating lunch...

How much of our current mess can be blamed on our collective unwillingness to concede that there are some things we can't "make right"?

I'm wondering if our overriding goal of trying to make things like education, medical care, retirement income, etc., available to everyone is simply chasing the impossible.

I realize I am going to get called a selfish s.o.b. for even writing this, but maybe we just have to recognize that there really are cost-benefit relationships involved in these things.

For example, getting 100% of all children born in the U.S. to graduate with an acceptable level of academic accomplishment will always be impossible due to various forms of learning disabilities, etc., so to demand 100% success is foolish. Yet, suppose we can get a 70% graduation rate at an acceptable level of academic achievement for $5,000 per student; 80% at $15,000; 85% at $30,000; 90% at $50,000; and, 97% at $100,000. Clearly, $100,000 per pupil is economically impossible and impractical, but where do we draw the line? I think we would all agree that spending any amount of money required to achieve 100% success would be foolish, but what if the incremental cost of going from 70% to 80% means pushing taxes so high that it destroys the tax base? We all want to see every child receive that chance so we keep doing more and more and more, after all - its for the children - and who can argue with that?

The same thing applies to medical care. No one wants to see people not get treatments and medicines they need, but what if the cost of making it available to everyone means taxing the economy into shambles?

Perhaps the lesson we should be learning is that, while we may want to see all things for all people, it is economically impossible in the long run - it requires massive borrowing to do it. I know there are already objections forming because of the wealth and money in the country. I'm not saying there isn't money available, but what if the policies that are required to get that money kill the goose that lays the golden eggs.

All tax policies have affects on the people being taxed and, importantly, the people receiving the benefits. There is constant pressure to increase the number of net benefit receivers and decrease the number of net tax payers and, as the number of net receivers increases, it puts ever more pressure on the remaining net payers.

For example, if you could stop working today and receive the same net benefits as working, would you continue to work? People aren't dumb. My dad figured out his retirement income would be the same as his after tax working income, so he retired. Why keep working? Just to pay taxes? At the same time, if your net after tax benefit at $200,000 of gross income is the same as it would be at $100,000 why do the extra $100,000 of work?

I have known the effects of these policies for years on the freedom of the citizens but maybe it runs deeper than that. If someone had pushed me on this two years ago I would have argued that while "soft" Socialism wasn't good for freedom, it was possible. We had almost all of Europe to use as an example. But the current economic crisis is global and certainly includes Europe. Perhaps those policies just won't work, in the long run, under any form of government...

Bah, I'm rambling...and a little incoherent, to boot...

1 comment:

Steven Rodgers

It occurred to me this morning that thinking of these problems as a series of cost-benefit issues is a huge mistake. Its amazing how hard it is not to fall into old "thinking habits." Using a cost-benefit approach in an attempt to "solve" these problems is to implicitly agree with a more fundamental issue - that one of the functions of government is to seize goods from one person, against his will, to give to another.

I think my logic is correct, if one assumes there is nothing wrong with legalized plunder.