The Economic Principal that has molded most of my beliefs

For you who follow my blog or come by and read it from time to time, I want to shed some light on just one principal that has so molded my beliefs when it comes to economic policies and government involvement in our lives. This is one of the most basic principals of economics but so few understand. The idea is based on there always being the kind of cost that so few people think about: OPPORTUNITY COSTS

Opportunity Costs is that which is given up in order to pursue something else. These costs involve the time you could have spent doing something else and that in which you could have spent your money on but can't due to spending it somewhere else. In other words the true cost of watching TV for 2 hours is what you could have spent those two hours on. The cost of spending 10 dollars on anything is not really the 10 dollars. Money is only a median of exchange. The true cost is anything else you could have done with that 10 dollars.

I was watching briefly the Tennessee Girls State basketball championship today. I'm excited about Stone Memorial boys basketball team being in the State next week along with head coach Mike Buck and assistant coach Neil Capps. So I was somewhat in the state tournament mood. But as funny as it is I was finding it hard to keep the tv on because it was showing on PBS. I totally disagree with the idea of PBS. As a libertarian, I am against state ran telivision. Aside from the Constitutional reasons are the Opportunity Costs reasons. Many will talk about the positives of PBS and how it can help educate some children and is good programming in a world with such filth on telivision today. But that is only half of economics.

Economics is about the BENEFITS but also about comparing that with the COSTS. Most will say that it is worth tens of millions of dollars to have that broadcast channel. They base this on the benefits and the fact that in a government with a 2 trillion dollar budget what is a few ten or hundred millions of dollars each year. Well the cost is anything else that money could have been spent on. That money could have been spent on better armor for our troops, better weapons for our police, better training for police and fire fighters. It could have been spent on fixing roads and making them safer for drivers. All things that government is suppose to do according to the constitution but also because there is not true market (supply/demand) for public goods as such.

PBS is fine and has some good things. But the question is not whether its good. The question is whether that is the best place for government to spend tax payers money? And I hope the paragraph above makes you rethink that. Money spent on Aids research is money that could have been spent on Cancer research. It is not that I have no sympathy for Aids victims, but quicker cures and better treatments for cancer would do far more good than the same for the disease of Aids. Often I sound heartless but I feel that since I agree with doing the greater good for the greater number of people, that my ideas have the most compassion.

One last example of opportunity costs. Years ago due to an incident at an airport in which an airplane hit another object on the runway, a small infant child was killed in the incident. To fix the problem, many were calling for the simple fix: Require a child proof seat on an airplane as you do in a car. The famous slogan: "If we buckle our kids at 55 mph, why not at 550 mph?" it makes a lot of sense. If those seats were required that child would be living today most likely. But that is not economics, that is only half of economics. The cost is what? Well with that law, the parent is now required to purchase another seat to put her child in, instead of holding onto his/her child. At this cost, many families might choose to drive to their destination instead of fly. Flying is much safer than driving statistically speaking! Thus this laws true cost: Far more deaths by driving than would have been saved flying!

When I decide my opinion on issues... I always think about OPPORTUNITY COSTS... I hope you start doing the same