Getting It Right on What Stuff Costs

I think we, as a nation, have a problem with how we discuss money and public policy. Let me compare it to household finances, since that is something everyone can relate to.

Imagine you have $100. You have choices on how to spend it. You could save it or invest it. You can buy something now that will save you money (or earn you money) later. You could buy something you need.

Or you could spend it on something entirely wasteful and frivolous. Like, an Xbox for your goldfish. That’s definitely a waste of money.

The prudent options here are obvious — save it, invest it, or spend it wisely on something you need. For example, I bought a coffee maker. I used to buy coffee out each day. The coffee maker cost money, but it allows me to save hundreds of dollars a year on my coffee habit.

Right now I’m working on my PhD. I pay tuition and school fees, plus I’m spending at least six years of my life in poverty as a poorly paid graduate student. Is that a waste of money? No. Right now, it’s not a profitable decision. In the long run, however, my degree will (hopefully) allow me to earn more money in my career.

When you can afford it, making decisions that allow you to save money or earn more down the road, even when the payoff doesn’t occur until years later, is a wise choice.

When we talk about public spending and the national budget, we all understand the general idea that we should spend our tax dollars on useful things that will benefit all of us. We shouldn’t pay wasteful, inflated prices for what we can get for less. And we certainly shouldn’t spend money on things we don’t need at all.

Where we really miss the boat is on the decisions we can make now to save or earn money later. And we often miss some of the larger implications of our choices.

What happens when we spend now to improve education and health care? Eventually, we save more and earn more through a healthier and better educated population.

If we get better coverage with universal health care for less than we spend on our privatized system, isn’t that a good investment — even if it costs money upfront? If the next generation of workers earns a better living because we invested in their education today, wasn’t that smart spending?

Money spent isn’t always just money down the drain. When you buy groceries and eat them, they’re gone. Does that mean you might as well live on ramen alone, since it’s cheap?

Of course not, because what you eat affects your long term health. Maybe that salad costs a bit more than ramen noodles now, but it will be a net gain in terms of health later. That means increased quality of life and economic productivity and decreased health expenses later.

The same is true when we discuss immigration and jobs.

Yes, immigrants who come here take jobs (though the question of whether “they” take “our” jobs is a lot more complicated, and requires a lot of unpacking besides). Regardless, they also create jobs. Immigrants are consumers, just like everyone else. When they consume housing, cars, furniture, clothes, and groceries, they contribute to the economy, and that creates new jobs.

When we discuss policy, we must remember that the first and most immediate result of a policy is not its only result. Often there is an initial cost but long term benefit for the American people. If there is long term gain to be had for our nation, then spending now is worthwhile.

Jill Richardson is pursuing a PhD in sociology at the University of Wisconsin-Madison.