Let’s price externalities, America

Hello, America. We have to talk. You are built on top of a mountain of federal (a trillion or so dollars) debt. That debt covers some things we need (roads, health care, social safety nets, education, scientific research) and subsidizes distasteful things (energy companies, military contractors, banks, real estate). You could consider that debt the tip of the iceberg. We can see how it contributes to the annual federal budget in dollars and by percentages. It’s a measurable, knowable thing.

Unfortunately, there’s also a ton of unmeasured debt we are accruing. We have to pay the price for it through social norms and charity. Here’s a hackish list:

  • food service is systematically underpaid so we tip them, most often poorly
  • the people who clean our hotel rooms are underpaid because they are invisible, unskilled, and often immigrant; depending on what you read, you should tip them but they also say you should hide your valuables from them so which is it, leave money laying around or distrust them not to rub your toothbrush in the toilet?
  • we pay a small tax on the amount of gasoline we use, but it is comically low, hasn’t gone up in years, and isn’t enough to pay for the usage of our crumbling roads, bridges, etc. sometimes it’s also used to pay for public transit, which is perverse during high gasoline prices if you’ve studied even rudimentary supply-and-demand
  • our children are raised mostly by women who are expected to just do it for free, despite what else they may want to do with their lives
  • we let financiers play with our retirement money, in theory because they know how to allocate it, get the occasional Google but more often some business tragicomedy, and in return they get to take a few percent off the top, which ends up being a huge number, for the service basically of them having gone to Harvard or their daddy knew a guy
  • millions of people live paycheck to paycheck, go hungry, go into massive debt if life comes at them wrong, etc. all because the Walmarts of the world (and there are way more than just Walmart) pay them next to nothing expecting the federal government to pick up the slack except the federal government has been systematically dismantled over the course of decades by men who fancy themselves smart enough to start The Next Walmart but in fact are barely smart enough to get themselves elected in a fair contest let alone actually lead a congressional district

But I digress and rant. And rant. Economists call these externalities. It’s when you have some accidental cost or benefit that is paid for by a third party, e.g. Walmart paying less than a living wage because the government will pick up the tab through welfare.

Point is, we’re underpaying for a lot of stuff. And that’s fun for some of us. We eat avocado toast, take exciting trips around the world, maybe drive race cars. We sort ourselves out so we don’t see the literally millions of people suffering because we’re not paying what it takes to give everyone a chance at doing better off than their parents or picking themselves up when life knocks them down. And then when some transparently awful populist blowhard runs for president, we’re shocked, just shocked, that he ends up winning.

Bring the higher taxes. Make me pay more to eat out. Charge me more for gas. I don’t mind thinking twice about whether I should subscribe to HBO and Showtime and Netflix. If I can’t go to Disney World as often, so be it.

It’s a small price to pay to have avoided what’s coming over the next four years: an increasingly unequal, unfair world for those of us who aren’t already doing great and white and male. Let me pay more for a greater country where everyone, not just the affluent, seek what it is that makes them happy in life without the fear of illness, bad circumstance, political or racial backlash. Let’s not lord that greater country over people to “motivate them to work harder and escape their current lot in life”. Let’s price the externalities that separate the concerns of the rich from the stresses of the poor and let’s all pay our share.