Thursday, December 27, 2007

benefits vs. costs of govt activism (revisited)

Another unsatisfying effort from the C-J this morning (the link goes to a related article; I can't find today's update on their website) on the costs and benefits of government activism...

Let's look at the numbers presented in the article-- sadly, just the benefits-- and then try to match it to the relevant costs.

Congress completed work yesterday on a $555 billion federal spending package that includes hundreds of millions of dollars for projects in Kentucky and Indiana...

Louisville will receive more than $50 million for special projects requested by Rep. John Yarmuth, D-3rd District, and Senate Minority Leader Mitch McConnell, R-Ky.

Today's article also mentions more than $10 billion in earmarks.

Local projects include $44.28 million for construction on McAlpine Locks and Dam on the Ohio River; $980,000 for planning and design of the Ohio River Bridges Project linking Indiana and Louisville; $1.25 million for runway work, lighting and signs at Louisville International Airport; $492,000 for mobile data computers for Louisville Metro Police; $500,000 for new sewers in Shively; and $150,000 for programs at the Louisville Science Center.

Kentucky projects include $210 million for economic-development projects across Kentucky, $191 million for various environmental programs (including money to continue cleaning up contamination at the Paducah Gaseous Diffusion Plant and to dispose of chemical weapons at the Blue Grass Army Depot), $48 million for health-care initiatives and research and development programs at universities around Kentucky, $7 million for Kentucky law-enforcement programs, and $1.4 million for Kentucky soil-erosion control and soil-conservation districts.

OK, now to the unanswered and unquestioned costs of this government spending-- and its impact on Louisville and Kentucky.

-$555 billion in spending (in this bill alone) works out to $1,850 per person in the U.S-- an average of $7,400 from a family of four.

-$10 billion in earmarks works out to $33 per person in the U.S.

-Jefferson County/Louisville has about 700K people; Kentucky has about 4.2M people.

-Louisville received about $50 million in "special projects" (earmarks?)-- about $71 per person. Most of that was for the McAlpine Locks and Dam-- what would seem to be standard infrastructure, not an earmark. (If we eliminate McAlpine from the calculation, Louisville received $9 per person.)

-Kentucky apparently received about $457 million in "area projects" (again, earmarks?)-- about $109 per person.

From the details presented, it's difficult to tell whether (or how) Louisville and Kentucky got a good return on their "investment". At the least, it should be explained how $1,850 in costs per person is beneficial to Louisvillians when they only receive $71 in benefits per person.

And of course, all of this misses the crucial constitutional, philosophical and practical issues of "federalism"-- why is the federal government involved in financing "economic development projects across Kentucky" or "new sewers in Shively"?

In any case, as I wrote yesterday, one would hope that the media would do a better job in objectively and comprehensively covering the costs and benefits of government. Although it's difficult to answer such a question, it's at least interesting to consider when such failures are a function of ignorance, laziness, or a statist bias that prefers not to talk about the costs of government.


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