Flaming Duck

Be Very Careful of What You Ask For

Question: How do governments fund "public goods" that they produce?
Answer: Taxes!

I am finding the story of Jennifer Wilbanks (the Runaway Bride in Georgia, for the uninformed) very interesting; but not for the reasons you might expect. I am not interested in why she got cold feet a few days before her wedding and ran to Las Vegas. I am not interested in the racial overtones of why she blamed Hispanics for her abduction. I don't even care if her fiance still wants to marry her. The story is interesting to planners and other government officials for what it has to say about government financing and this story actually has something to contribute to the government funding discussion.

First, I want to give a quick definition. A public good is product or service that meets two criteria. These criteria are that it is
a) non-excludible and
b) non-rivalous.

From Public goods: A Glossary of Political Economy Terms a public good is a product or service,

"which cannot practically be withheld from one individual consumer without withholding them from all (the 'nonexcludability criterion') and for which the marginal cost of an additional person consuming them, once they have been produced, is zero (the 'nonrivalrous consumption' criterion)."

In other words, once produced, it is
a) difficult to provide to one and exclude others and
b) the use of the good or service does not diminish its use by others.

Some good examples of public goods are emergency services, roads or national defense. A major reason for forming a government is to pool resources that can then be used to produce "public goods" that can be enjoyed by the entire community.

So how does this relate Jennifer Wilbanks? It relates because a recent poll shows that the critics of the situation want Jennifer to pay for the search that occurred. And it's not just a few people. The cited poll shows that the public wants Jennifer to pay for the search by a margin of over 3 to 1! The hue and cry is almost deafening.

Back in March, I wrote a post that talked about how government reacts when you ask it to do something. Government officials are put into office by promising to do the things that their constituents ask them to do. They want to keep their jobs and will likely KEEP doing things that you ask them to do. You can imagine the joy they feel when you ask them to put money into the government coffers via methods other than taxes. This is a politician's dream scenario. Governments are struggling to pay for the increased demands of their citizens. They NEED to find other sources of revenue, revenue such as charges for services like emergency responders or searches. The critics of Jennifer Wilbanks are giving public officials a VERY handy excuse to implement a new fee!

Services like roads and police service and paramedic service are logically a "public good" and therefore quite rightly in the natural province of government. That is the reason we give our government the power to tax. We desire the use of the public goods and are willing to pay for them. The search that occurred in the Wilbanks story was a public good and had already been paid for with tax dollars. "Right," you say, "we can't let someone commit a crime like this and then charge the government for the search. I want the person responsible to pay for it so it doesn't come from tax dollars!" I say, "Be careful for what you ask for."

Let's carry this out a bit further. Should the drunk that causes an accident pay for the emergency services used to help the victims? (Yes!) Should a lost 5-year old pay for the cost of the search? (No?) Should all of our roads become toll roads? (Of course not!) Hopefully you see the slippery slope here. Where do we draw the line?

The problem is one of priorities. Our government (federal, state and local) currently uses much of its available tax base to support things that are not logically a "public good." A perfect example of this is caring for the poor. While caring for the poor is a laudable goal, and I personally contribute much to helping the needy, it is not a "public good." This type of service does not meet our first criteria because it is very easy to focus such help on a single person or family (it fails the nonexcludability test). It also fails the second criteria because the addition of each individual adds a proportional amount to the cost of the service (it fails the nonrivalrous consumption test).

(Some may say that I have set up a straw man because the creation of "public goods" is not the only function of government. I would agree with that statement but would not call it a straw man. The private sector is often more efficient in producing goods and delivering service. When a good or service can be provide by the private sector, it makes sense to leave that to private citizens. This is generally the case for everything other than "public goods.")

So the case of Jennifer Wilbanks, the runaway bride, should be paid for with tax dollars. The provision of the search resources is logically a "public good" and that is a function of government. This may be case where the funds were misspent but in a free society there will be people who misuse the system. Just don't give the government another excuse to reach into our pockets. We pay taxes. We pay taxes to provide "public goods." The real solution lies in getting the government out areas where it shouldn't be and using those funds for the good of us all.

posted by VARepublicMan @ 7:34 PM