The uncounted costs of public goods and services

Special to The TelegraphFebruary 8, 2012 

We like our troops fighting for us. We like free public schools. We like the convenience of interstates and other toll-free public roads.We like cheap electricity powering our homes and devices. We like unquestioned access to hospital care in an emergency. We like our Medicaid and Medicare. But we don’t want to count, or pay for, the full costs of all our public goods and services.

Government, our public utilities and other quasi-public institutions give us plenty. But it’s not for free, or even cheap. In the end, the public usually pays the full costs of the services that the public may imagine itself to be enjoying on someone else’s dime. That includes the uncounted costs.

It’s great to have fine young Americans in uniform, promoting the American way. It’s not so great for them to suffer amputations and brain injuries, costing them and us all for lifetimes of disability. It’s nice to provide kids with publicly funded educational opportunities, but not so nice when we learn how hard and costly it is to make a real difference. It’s noble to have everyone get basic health care, but crushing to shoulder runaway insurance bills.

Costs for public-spirited projects have a way of worming themselves onto the public ledger, embedding themselves below the surface -- or in some cases above it. For a modest example, take the visually jarring power, phone and cable lines that detract daily from our appreciation of the beauty of our native land. Though underground lines would initially cost more, burying them at the beginning would relieve us of visual pollution and would minimize maintenance costs later after storms, which cause more damage than would wayward backhoes.

Consider, too, the “free” interstates that roar along 24/7, hampering the enjoyment of life by those who live close by, though sound barriers would minimize the spillover noise pollution. When interstates such as Interstate 75 and Interstate 16 blew through Macon’s neighborhoods and parks, adjacent land and community life lost something special. The same thing happened when the “Freedom” Parkway split Martin Luther King’s old Fourth Ward neighborhood in Atlanta. We thoughtlessly enjoy the benefits of our fast roads without considering their deeper costs to community and environment.

Try visiting the emergency room sometime. The “free” care provided there to people with non-emergency ailments diminishes the care available in true emergencies, occasionally in effect killing those who really need emergency care. Adding economic insult to injury, the public still gets the bill for the people who are inappropriately clogging the emergency room, because their costs are tacked on to everyone else’s private insurance bills. And then there are the runaway costs for Medicaid and Medicare. Medicaid alone now takes up almost 20 percent of the average state’s total budget, up from 16.8 percent before heath care reform was passed.

We systematically under-count the true costs of public goods and services. When fancy new public infrastructure is built, for instance pursuant to the ELOSTs and SPLOSTs in Georgia, no mention is usually made of the costs for staffing and maintaining the infrastructure. Little thought is given to possible overuse, how to pay for the hidden costs, or whether proposed projects are worth the whole price.

The answer is not simply to cut corners. Up front, it’s obviously cheaper to build interstates without good sound barriers, to string up rather than bury electric lines, to just leave the emergency room open to all rather than also running clinics for basic health care, and to install surveillance cameras in our high schools rather than pay competent monitors of safety. But the costs are merely delayed. They pile on in the end.

The better answer is to count and figure out how to pay for the full costs of public goods and services at the beginning -- before we embark on things that we can’t sustain. Greece and Rome both fell when their projects and wars got out of scale with their ability to pay for them. We are doing the same thing in the U.S. by taking on projects that we pretend are cheaper than they are, and then finding out -- surprise! -- that we really can’t sustain them at their true costs.

The time to call out the bean counters is in the beginning, not at the bitter end. If we can’t afford all the costs of a particular public project, then the public shouldn’t take it on.

David Oedel is a professor of law at Mercer University Law School. He is presently studying the hidden costs of health care reform while representing the state of Georgia in the challenge to health care reform’s constitutionality now before the U.S. Supreme Court.

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