THE BLOG

Running Government Like a Business Means Looking Beyond Costs

08/31/2015 12:58 EDT | Updated 08/31/2016 05:59 EDT
Feng Yu via Getty Images

We're in an election cycle on both sides of the border and budgets, deficits and taxes are all hot topics. After the trickle-down era of the 1980s, we got in the habit of looking at everything like it was a spreadsheet. Running government "like a business" became the new norm. However, that was always just rhetoric, not reality.

If we were running things "like a business," we would be doing something like a cost-benefit analysis. No business would say "$10 million is a lot of money, let's not upgrade the factory" without looking at the economic benefit of that upgrade. Somehow, we became obsessed with cost and swept the other half of the equation under the rug. Everything that government does, or does not do, has consequences that go beyond the number of tax dollars spent.

For example, let's say that there was a comet streaking toward Earth. Let's say that we knew how to deflect it or blow it up, and that it was going to cost $1 trillion.

As a simple budget line item, the math is pretty simple. We can save the tax payers $1 trillion by doing nothing at all. Obviously, there would be immediate public outcry, however, because the cost to society for allowing the comet to strike the Earth would far exceed $1 trillion and result in immeasurable destruction and loss of life.

However, there are many other (less calamitous) issues where politicians simply decide to let the asteroid come, and they are rarely questioned by anyone.

For example, allowing more air and water pollution saves money for business and governments, and therefore also for taxpayers. However, that additional pollution has costs as well. Generally, it will show up in increased health care costs, increased sick time (days lost from work or school) and, in some cases, decreased tourism and even fish stocks.

The cost of not fixing education shows up in a less-skilled work force, diminished earning potential for individuals and lower tax revenues.

The cost of not having a strong sex-education curriculum and family planning/public health services shows up in increased rates of sexually transmitted diseases, unplanned pregnancies, decreased productivity, increased poverty and higher health care costs.

The cost of climate change will impact almost all aspects of life and the economy, and could ultimately be nearly as expensive as allowing a comet to hit.

(And yes, there are potentially less-obvious costs associated with tax hikes as well.)

This list could go on and on. Everything is connected, everything has costs -- a cost of action and a cost of inaction. Frequently, the cost of inaction is regressive, falling disproportionately on the shoulders of the poorest and most vulnerable members of society.

We've gotten really good at pinpointing the cost of things. That, after all, is the easy part. A look at a spreadsheet or ledger can usually tell us that. The cost of not doing things, of allowing problems to stand, is more complex. It doesn't fit as neatly into a sound byte, and it is rarely talked about or considered by politicians, the media, or most voters.

I'm not necessarily saying that the government needs to address every problem, or that government needs to radically increase spending. What I am saying is that we need to start asking politicians to show their work and telling the media that we want to see all of the math, and not just the government ledger.

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