Archive for Tuesday, February 27, 2007

Guest Commentary: Important thing to watch too often goes unseen

February 27, 2007

The Kansas legislative session is now in full swing. As policymakers debate the issues there is one thing they should strive to remember: that which too often goes unseen.

Politics naturally leads to looking at the first consequence -- the most obvious, upfront, and easily identifiable result of any political action. This result is what the public typically hears about and what the politicians then use to garner future support from their constituents. But, both the public and the politicians should also consider what is unseen: all of the other consequences.

In 1848 French political economist Frederic Bastiat published a book that laid out some basic principles of public policy that we should all consider when making important political decisions. In his book, Selected Essays on Political Economy, Bastiat tells the story of a broken window. Far from being distressed, onlookers say that such accidents help keep the economy thriving by spurring on spending that otherwise would have not taken place. "What would become of the glaziers if no one ever broke a window?"
The onlookers are thinking about what they see -- a broken window in need of repair. So, when someone then spends money to fix the window, the glazier benefits.

That's true. Here's the problem, though: what is not seen has been ignored. Bastiat's point is that the money would have been spent on something else had someone not broken the window. Maybe the person would have bought a book or replaced his worn out shoes. We don't see those other options so we don't think about the trade-off. Plus, something has been destroyed (the window) and society has lost the value of the window. That is a definite consequence.It's a simple concept but a tough lesson for us all to learn.

Here's the lesson for public policy: when the government spends money on a program there is a trade-off. Either that money could have been spent on some other government program or it could have been spent by the person who earned the money. Yet, we tend to value government programs only by what we see as good coming from the program, not compared to what could have been.

One thing that is unseen is what taxpayers do with money. For instance, they invest in Kansas businesses, they purchase goods and services, and they donate to causes that are important to them. Every time the government spends a dollar, that is a dollar that would have been used for something else.Part of this lesson is to remember that good intentions can lead to bad results. When the government establishes or funds a program that it thinks will help people, they must be sure that their decision does more good than harm. The only way to honestly assess that is to look both at the immediate consequences and the unseen results. And it is the public's job to hold politicians to that.This concept applies to every issue and every law. One major area of concern before many states, including Kansas, is what to do about health care. But what happens when universal health care is established? Empirically, it leads to long waiting lists for procedures and a lack of doctors who will provide the services needed. Those are significant consequences to weigh.

Another perennial issue is public works. Wichita is building an arena. Proponents have claimed that this arena will lead to economic growth and more jobs. But those who have looked at the unseen point out that any economic growth will actually be a shift in economic activity from one area to another. People only have so much disposable income. If they decide to go to dinner downtown before attending an arena event they are spending money that they probably would have spent eating somewhere else and on some other entertainment. That does not result in a net economic gain.When people privately purchase services and make household decisions they look at the costs and the trade-offs to them. It is also up to people to make sure that decisions made by the government are made understanding their consequences and trade-offs. It may be easier to sit back and let the government spend money, but we must remember it is our money and our futures, too. Kansans should demand the best value for those dollars.

Sarah McIntosh is director of outreach for the Kansas-based Flint Hills Center for Public Policy. The Center provides critical information about policy options toegislators and citizens. More information is available at the center's Web site, www.flinthills.org.

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