Needs and Wants

The TSPLOST frenzy has moved into high gear as we approach the July 31 election. The “pro” side makes some compelling arguments. Compelling that is until you actually think about them.

Needs and wants: It is argued that all projects are beneficial. Ok, I’ll bite. Every project is beneficial. But, just because some proposal IS beneficial in some tangential way, it does not then logically follow that it MUST be funded. Finishing out my basement, remodeling the kitchen and buying a new car are all beneficial for me…but does that necessarily mean I MUST do these things? No, I prioritize those things that are most important. The “pro” side seems to mistake wants for needs. Needs are limited, wants are unlimited; therein lies the danger of confusing the two.

Broad, low taxes are easier to hide than narrow, high taxes: We are told we need more revenue because motor fuel tax receipts have fallen over the last few decades (due to increased fuel efficiency). So why is the obvious solution of raising the motor fuel tax not on the table? Because it is politically unfeasible to add 30¢ of tax to a gallon of gas (currently 47¢ total or 29¢ of GA tax). However, it apparently is politically feasible to slip in a 1¢ tax on every dollar of every sale (except for motor fuel and automobiles, of course, the two things that, you know, are actually correlated to road use).

How much should we spend on roads?: Another argument is that we are spending $1 per year on roads and since this is not “working” the only solution is to spend $2 a year. In this “more is better” argument how does one ever determine “ok, this is enough.” Why not $3? $8? By what non-arbitrary method can anyone determine the ideal amount? Some say define it as a % of the economy or of tax revenue. Oh, please. Do you buy food based on what percentage it is of your total income? (“ahh yes, I better be sure I spend 5% of my pay on food this week!”). No, nobody does that. Pulling arbitrary percentages out of thin air does not provide a rational basis for determining the proper cost of anything. Ok, so how can we know the proper amount? The same way other scarce resources are allocated in a market economy: prices. If we had a mostly private road system prices would rationally allocate monetary resources where they are most needed (just as it does for other goods – prices inform us that it makes more sense to build homes out of wood than out of titanium). Heavily used roads would receive more attention (due to higher toll receipts) than lightly travelled roads.

Jobs: This argument is more of the same old Keynesian fallacies about government spending creating jobs. $18 billion in increased taxes merely removes $18 billion worth of some jobs in order to create $18 billion in other jobs. Moving money from my left pocket to my right pocket does not increase my wealth. The Keynesians are quite fond of this resource shuffle that suggests moving checkers around the board increases the number of checkers. For example, they use this argument to claim that new roads foster growth of new businesses (the “if you build it, they will come” argument). Businesses do come, however they are simply diverted from where they would have otherwise gone. Moving stuff is not the same as creating stuff.

A permanent tax to maintain a permanent bubble: For those old enough to remember Carnac the Magnificent  – the answer is: “Politicians plead to prevent a crisis of massive unemployment in heavy construction.” The question: “What will the news headline be in 2022 when the TSPLOST is up for renewal?” This tax is the quintessential government bubble: turn on the tax spigot to fill the tub but once that spigot is turned off the tub quickly drains. Anyone who threatens to turn off that spigot is vilified as anti-<insert locality> and anti-job.

The pro side insists, “We must DO something!” Yes, we must. Perhaps that “something” should be to force those in government to reprioritize expenditures with the money they already get. Maybe we’re “short” on funds due to massive mismanagement. Should we reward those that have already squandered our money with even more money, because this time, this time they promise to get it right?

On July 31, vote NO on TSPLOST.

2 thoughts on “Needs and Wants

  1. Pingback: Needs & Wants – Why You Should Vote NO on Tuesday

  2. Thomas Nielsen

    Your recent post regarding TSPLOST brings to mind a local issue we have with roads here in Birmingham, AL. The powers that be plan a new road as a “northern beltline” for Birmingham that will connect to I-22 and provide a bypass to downtown to the North. The proposed beltline is quite controversial and has questionable economic benefits. Except for an outer beltway proposal around Houston, Birmingham’s Northern Beltline is the longest interstate extension project in the country on U.S. Department of Transportation’s list of major projects. The road is estimated to cost a total of $4.7 billion and to be finished in about 2048.

    The main support for the proposed beltline argues for “improved economic opportunity and overall quality of life” and states that arguments that the beltline is a political boondoggle are “hollow and illusionary claims”.

    A recent report shows that construction of the beltline would produce person-years of work, but not permanent jobs. Under optimistic assumptions, there would be 4,000 or jobs each year of construction, but studies suggest 2,800 or fewer jobs each year of construction to be more realistic, and most not for decades.

    The main argument that supporters use is that the funding is “provided by the long-established federal Appalachian Regional Commission” and therefore somehow does not come out of the pockets of local taxpayers. What supporters whitewash is that while supporting may be “federal”, we all still pay for this out of our tax dollars. As a main local advocate states “The only ‘either-or’ consideration for these funds is that we either use this money for the Northern Beltline or we lose it to another state’s project. Period.” This is precisely the type of argument that needs to be defeated. Federal money does not appear out of thin air – it comes from our taxes. Our nation is heavily in debt and for us to argue whether we should “grab” the money before it goes to another state is beside the point.

    Imagine the same debate in your personal budget. Say you have a certain amount set aside for food, a certain amount to pay rent or mortgage, and a certain amount to pay for utilities. There is, hopefully, some money set aside for entertainment and other luxuries. Now imagine you have a big deficit in your bank account. You would not go out to a casino and argue that if you did not spend the money on entertainment, it might go to some other budget item like food.

    The entire system of “allocation of funds” is broken and needs to be revised. Clearly, the funding for the Northern Beltline is an “earmark”. Unfortunately our local representatives including U.S. Rep. Spencer Bachus and U.S. Sen. Richard Shelby are strong supporters of the existing earmark system and vote to quash any bills that would expose such a system or put limits on it.

    The “Northern Beltline” must be defeated and all such future projects should be undertaken using private funds. If the road is such an economic driver, there should be no shortage of companies ready to take advantage. Except of course that they will be told that “you didn’t build that”!

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