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Excessive societal costs

2013-07-03

Here in the USA we face at least a trio of excessive costs that hold us back from a better life.  The first cost, the one I’m most familiar with, is medical care.  The cost of medical care is grossly excessive.  There is an article in Sunday’s New York Times about the cost of obstetrical care, that is, delivering babies., that illustrates this problem.

According to the NYT, the cost of obstetrical care has approximately tripled since 1996, an increase of 300%.  The rate of inflation over that period has been about 50%.  (Inflation rates can be easily calculated with the Inflation Rate Calculator web site.)  Although obstetrics is a tiny part of medical care (50 billion dollars a year) it is the same with all branches of medicine.  The system is bad, and there are many examples of better medical systems in other countries.

The system is so bad that despite costs that are double those of European countries, infant mortality and life span are worse here because so many people are uninsured and unable to obtain adequate medical care.  There are perhaps forty to fifty million people who are either uninsured or inadequately insured in this country and they are all at risk for inadequate medical care because of costs.  The majority of bankruptcies in this country mention medical debts as a primary factor in the declaration. This is a national disgrace, and you know that someone is profiting exorbitantly at the expense of the uninsured and the insurance companies (who can afford it because of enormous premiums.)

The second excessive cost to society is our prison system.  According to Wikipedia, we are the country with the most prisoners in jail by population, 716 per hundred thousand… some familiar countries with sharply  lower rates include India, with 30 per hundred thousand (216th out of 223 countries) and Japan, with 54.  England and Wales have 148.

The costs of putting and keeping someone in jail are high, and the effect on the prisoner is especially expensive because when he or she is released, there is little prospect of honest employment for an ex-con.  Therefore, recidivism rates are fifty to seventy percent, and income is reduced by over 50%, reducing tax revenues as well (Wikipedia.)  In addition, if the prisoner has dependents, their source of support will be cut off by imprisonment, possibly permanently.  It is likely that many dependents will be forced to look to government for their support, an additional cost to society.

When you look at our rate of imprisonment and compare it to some other perfectly reasonable countries with low crime rates, you can see that there is considerable room for improvement.  Reduction in imprisonment is unlikely to lead to more crime, and the money saved can be used to hire more policemen if you are concerned.

A particularly pernicious gambit that is tempting to government because of “saving money” is the growth of the private prison industry.  You can be sure that once a private company has control of a prison, that prison will show a profit regardless of any unpleasant effects on the prisoners due to cost saving measures, and, according to logical industry thinking, will lobby to get more prisoners.  That is the reverse of what should be happening.  A prison system controlled by private enterprise will always increase the number of prisoners and is susceptible to corruption and malfeasance; only government can reduce the prison population and enforce oversight of venality.

There is, possibly, a significant correlation between the US imprisonment rate and the fact that there are enough firearms in private hands to arm virtually every man, woman, and child.  This is an issue that should be evaluated further.

The third excessive cost is military.  Reasonable people can feel dread while contemplating the fact that we possess about 2,000 active nuclear weapons, virtually the same number as the Russians.  If by some terrible chance we detonated all 2,000 of our bombs and the Russians did the same, that would be the end of all multicellular life on Earth( there is a bacterium that is resistant to radiation that would probably flourish after such an incident.)

So why are we still maintaining so many bombs, at such enormous cost?  Who in his right mind would ever order even one to be used, under any circumstances?  Oh, wait, there’s always the “Seven Days in May” scenario (watch the movie to see how this works.)

The same concerns apply to much of our military spending.  The costs of supporting our armed forces (including veterans) are not reducible because of the commitments soldiers have made, but the costs of producing warplanes, battleships, tanks, and so on are fair game.  Surely some of the factories devoted to arms production could be repurposed to making cranes, caterpillar tractors, and other heavy machinery for the construction industry.

These three types of excessive cost are the most egregious, unfair, and iniquitous aspects of the American system but there are others.  I invite you to make suggestions as to other areas of gross and excessive costs that are built in to our system… our use of  coal and petroleum products is one.

These excessive costs are directly reflected in our tax rates.  Although our total tax rates are low compared to other countries (partly because medical care is not included) we spend too much money on the wrong things.  For example, a poor child goes to an underfunded school (because he lives in a poor district which can’t raise enough money to have good schools), fails to graduate high school, can’t get a job, turns to crime, is incarcerated, has children out of wedlock, and can’t support them.  (Ideally, every school in the country should get the same funding through federal intervention, and, in fairness, all schools should be raised to the level of the highest-funded school no matter how much it costs.  The benefits to society, though perhaps delayed by up to ten years, would be dramatic.)

If he does get a job, it is at without benefits, not full-time, and at minimum wage, which is not enough to keep body and soul together– especially when regressive taxes like the payroll tax eat up the paycheck.  His children will face the same problems plus inadequate housing and food due to the parent’s poverty, and psychological problems due to inadequate parenting.  (If we fed, housed, and educated a child in his own home, we could produce a functioning member of society who pays taxes and raises children who have some prospect of exceeding their parent’s status.  In the US the minimum wage is less than $10 an hour, but in some other countries like Australia it is $16, enough to support a family of three in a pinch.

Given all these costs and regressive taxes like sales tax and payroll tax, it is not surprising that income inequality has reached levels not seen since the beginning of the Depression and that average income has actually gone down over the last ten years.  The gross greed, brutality, and venality of the American system is hidden by fair promises from bought and paid for politicians; people are distracted by watching Fox News and reality television while their pensions are gradually disappearing and infrastructure is silently decaying around them.  We are on our way to Hell in a handbasket if we don’t make some changes soon.

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