The Cost of Safety Nets

This article does a good job of articulating an idea I hear often. However, it ignores the “big issue” concerning a more expansive social safety net. More expansive means more expensive. Robust social safety nets aren’t cheap. So where does the money come from? Ultimately, it comes from capital. The more we spend on safety nets, the less we have to spend on capital projects.

The US has spent a lot less on its social safety nets than a lot of other countries. We also invested a lot more in capital projects.Look around your house: you might see HDTVs, DVRs, cell phones, cable TV, GPS devices, computers, iPods, stain resistant clothing, and many cooking and cleaning devices. Look in your garage: you might see disk brakes, cruise control, air bags, air conditioning, and crash resistant designs. Look around your doctor’s office: you might see laser surgical devices, pacemakers, MRI machines, numerous miracle pharmaceuticals, and many more things.

There is no avoiding the trade-off. It’s not wrong to favor one approach over the other – but it is wrong to pretend there is no tradeoff. You might favor a better social safety net and be willing to sacrifice the next generation cell phone in order to get it. But I wonder – are you willing to sacrifice future medical technology which would have saved your life?

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