The true cost of ‘business as usual’
Back in August, I attended a workshop at the Center for Ecoliteracy in—yep, you guessed it—Berkeley (just laying out my liberal cred here). It was a great event on a number of levels, but the one piece of information that has stuck in my mind is this number: $190 billion.
One hundred and ninety billion dollars is one-third of the United States’ annual military budget.
It is one-sixth of the world’s annual military budget.
It is a little over one-quarter the amount already spent on the Troubled Asset Relief Program, about 3 percent of the Fed rescue efforts, and just a teeny bit more than what we U.S. taxpayers have already spent to rescue one company—AIG—from the economic collapse.
It is also the annual cost to restore the Earth’s ecosystems.
That is, in order to “reforest the earth, protect topsoil, restore rangelands and fisheries, stabilize water tables, and protect biological diversity,” according to the Earth Policy Institute, it would cost us a fraction of what United States taxpayers have already spent on bailing out the financial industry, or a few months of waging war in Iraq. And, since it is a cost that would benefit all countries on Earth, it wouldn’t have to fall exclusively on the shoulders of U.S. taxpayers. (Although we should absorb around 80 percent of it, since that is the percentage our tiny population consumes and pollutes.)
All too often, I hear conservatives complain about the “high costs” of progressive programs to offset the destructive forces of free markets on humans and the environment that sustain us. Why do we so rarely hear about the high cost of our current practices? A true fiscal conservative would ask for a balance sheet—a cost-benefit analysis that weighs current practice against the alternative.
According to several scientific and economic analyses, the current annual benefit of “ecosystem services”—that is, all the essential building blocks of economic life (not to mention, life) such as fertile soil and clean water—contribute approximately $33 trillion annually. That is how much we would have to pay, if we even could, to replace these services after the ecosystems that provide them have been degraded and depleted beyond repair. So, the annual “cost” of $190 billion to restore the system has to be subtracted from the annual cost of doing nothing—many, many times more.
So, we think saving the Earth will be too expensive? Try unregulated capitalism. Oh. Right. Been there.
Similar accounting “logic”—or lack thereof—distorts debates over the “cost” of health care reform. Because budget analysts can’t be absolutely certain of the exact amount of savings that would emerge from the proposed reforms, they do not calculate most of those savings into their cost projections for the government. For example, private insurers are estimated to pay between 15 and 30 percent in administrative overhead, whereas public programs such as Medicare here and state-run health care abroad charge 2-5 percent. Surely, the competition of an efficient government-run program would force private insurers to become more lean and efficient themselves, but by how much? And when? We don’t know exactly, so we don’t calculate it, and thereby what should be obvious common sense gets twisted and submerged. The analysis is parallel in other domains—education, infrastructure, and other examples where wise investments of public funds would equal long-term capital payback, but where so-called “conservatives” would prefer to starve programs out of existence in the short term, foisting the true costs on future generations of taxpayers.
So the next time you hear that change is “too expensive,” stop and ask about the true cost of the status quo.