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Monday, February 27, 2006

The Cost of Doing Business

So just what do government services actually cost?

Do we know? Should we charge accordingly and let the free market determine whether or not it is worth the price?

For instance, what does smoking actually cost the government and should we charge that cost divided by the product usage?

Transportation. If people had to vote on projects based upon their usage and subsequent cost because of them via whatever funding mechanism, would the project be that important?

These were topics of a very lively discussion at the Mercatus Center breakfast on Friday held at the Jefferson Hotel. Speakers were Dr. Russell Roberts (thank heaven for U of Chicago!) and Maurice McTigue and they definitely were thinking outside the box.

Any thoughts along these lines?

4 Comments:

  • How would you determine what smoking actually costs the Commonwealth? Who would you charge?

    Would you also determine and charge for other LEGAL human behaviors: perfume wearers, hairspray users, obese people, people with high cholesterol, people who drink alcohol, high heel shoe wearers, people who suffer from depression, people who participate in extreme sports, people who tan, etc?

    Nailing down the costs of transportation projects is a lot easier than those of human health.

    A slippery slope indeed.

    By Blogger Lucy Jones, at 2/27/2006 10:58 PM  

  • Right. But should we try to understand the cost to government and charge accordingly or should we subsidize the behavior? Without judging the behavior, would it stand on its own?

    By Anonymous Chris Saxman, at 2/28/2006 9:31 AM  

  • "But should we try to understand the cost to government and charge accordingly or should we subsidize the behavior"

    This leads to the heart of the Transportation problem. By continually bailing out congested areas there are no consequences for poor land use planning behavior. The government is basically subsidizing the behavior of poor land use and planning decisions. This sounds like a no to this "Without judging the behavior, would it stand on its own?

    However, This subsidizing increases the economic output which in turn provides dollers for less economic productive areas. Everything is connected.

    There needs to be cost/benefit trade off analysis to decide on spending. If for every dollar spent on transportation an additional doller can be generated in tax revenue the government should support a project. If the additional tax revenue is less than the money spent for a given project private industry should foot the bill.

    By Blogger nova_middle_man, at 2/28/2006 12:20 PM  

  • can you tie local funding to local local decision making? meaning, can the state make the localities consider the cost of growth by holding the revenue and making them pay for, in part, some of these larger projects. Like maybe take a percent of their taxes on property taxes and bpol>

    By Anonymous Anonymous, at 2/28/2006 2:48 PM  

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