Top Ten Bad Assumptions: 7 – Judge a policy based on its benefits.

Alternate Assumption:  Judge a policy based on its benefits and its costs.

This is probably the bad assumption that we see the most.  Policy A helps people.  Therefore Policy A must be good.  If anyone opposes Policy A, that must mean that they don’t want to help people.  This bad assumption usually involves government spending, but it doesn’t have to.  It also applies to both sides of the political spectrum.  A “Jobs bill” might hurt the environment or a “Clean Air” bill might cost jobs.

Generally, any policy has both costs and benefits.  The costs frequently involve spending money, but there can be other costs as well.  For example, raising the minimum wage might reduce the number of minimum wage jobs.  One can debate whether the benefit justifies the cost, but too frequently there is no debate as people only look at the benefit.

The debate on global warming provides a good illustration for this.  Recently Bill O’Reilly said something to the effect  that even if global warming claims are exaggerated, it can’t hurt removing pollutants from the air.  It certainly can hurt.  We each can drastically reduce our carbon footprint.  All we need to do is to stop driving and stop using electricity produced by coal-fired power plants.  Is it worth is?  If the threat is dire enough, yes it is.  If the threat is remote and speculative, then it probably isn’t.  We need to compare the benefits of reducing the carbon emissions to the cost of doing so.  Is it worth giving up driving?  Is it worth losing the millions of jobs we would surely lose if there was no more driving?  You decide.

Right now the national debt is approximately $17 trillion.  Of this, $7 trillion has been accumulated in the last six years under Obama.  This should alarm both conservatives and liberals.  Let’s say you are a devout  liberal and you believe that government has the obligation to help the needy.  There is a new proposal to spend $50 billion on anti-poverty programs.  The question you typically ask is does this program provide real help to people who need help.  Let’s assume the answer is yes.  As a result, you support this bill.

I suggest that you are asking the wrong question.  The question you should ask is does this program provide enough help to justify borrowing the money from China that one day our children and grandchildren will have to repay.  Moreover, since you believe that government should help the needy, does it provide enough help to the needy today to justify the fact that there won’t be any money available for government to help the needy in future generations?

We can’t just look at the benefits.  We need to look at the benefits and the costs.

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