Real Money
Recently Eli, who just had his 7th birthday, wanted to go into town with me after school. He'd been getting a little money of his own, and he wanted some practice at choosing what to buy, getting his own change, stuff like that. He bought a bag of popcorn, a baby banana, a little metal plane and a digital watch. (Actually, I did suspect the watch was too good to be true at $2; it fell apart the first time we tried to set it. But, we did keep the receipt. So we'll return it. And really, I find it almost miraculous that those industrious folks in China can ship us a watch that might work -- for only two bucks.) I was very pleased with Eli's carefully-considered purchases, which totaled $4.35.
Lisa started playing the violin at about the age of ten. Growing up in the Bronx, she played during her school days with the All-City Orchestra at Lincoln Center. Later she went to college on a music scholarship -- in short, she's quite an accomplished fiddler. But now as a Mom with two kids and many other concerns, her violin playing has dropped off. What we didn't realize until recently, though, was how much her diminished joy in playing stemmed from the crappy, broken-down instrument she had been carrying around for something like twenty-five years. She had a chance to play one that was being rented by a friend, and she fell in love all over again. Well, lo and behold, her friend's ambition to play the fiddle failed to match her available practice time, and she asked whether Lisa might want to take over her lease. You just can't buy that kind of fun -- but you can purchase a violin. On a rent-to-buy plan, it'll cost us about $1,000.00.
It turns out that beauty and happiness are quite a bargain. Death and mayhem tend to be a lot pricier. For me to start criticizing US military profligacy is a little bit like a four-year-old starting to tell knock-knock jokes -- I mean, once you get started, why stop? So I will restrict myself to one example: the F-22 "Raptor" Advanced Tactical Fighter. This is one of three new air-to-air combat planes currently being purchased by our nation; it is the most expensive, the fastest, and the costliest. And it's, like, way cool: it has stealth technology and can do pinpoint maneuvers at supersonic speeds. The only problem with it is that the airplane it is replacing, the F-15E "Eagle", is universally acknowledged as superior to any fighter plane now deployed, or being developed, by any other nation. The F-22 has no mission, except perhaps to shoot down F-15s in practice. But we are spending five billion dollars a year on it; that's $5,000,000,000.00, or five million very playable violins.
You see, it's tax time again, a time of year I don't like one bit. It forces me to spend far too much time poring over numbers, statements, forms, procedures, affidavits, Federal Publications. I suffer from a kind of artificially-induced annual PMS at the beginning of April. I sort of growl a lot. My posture slumps. My head aches; my eyes are red; my desk is awash with ugly paperwork. You know what I mean. I have evidence, dear readers, that many of you do have a pretty good idea what I'm talking about here. It turns out that the cost of "tax time" makes even the extravagant price of the F-22 seem like chicken feed (or, for that matter, the $3 billion per year that Bush promised -- but has not yet delivered -- to fight AIDS in Africa). According to a study by the Independent Institute, the total current annual cost of compliance with the United States Federal Income Tax is approximately a hundred and ninety four billion dollars. Yep. That amounts to about 20¢ per dollar of federal revenue: $194,000,000,000.00.
Here's a funny thing: you hear a lot about the gigantic United States trade deficit, caused primarily by the astounding volume of stuff we import from China (like Eli's $2 watch). Well, I guess it is a lot: last year the United States imported $100.1 billion worth of stuff from China, while sending a mere $16.3 billion worth of stuff there; that amounts to an annual amount loaned to the United States, to cover our consumption of Chinese goods, of $83.8 billion. Seems like a lot until you realize that if we just got rid of the income tax, we could easily pay it off. See, we georgists suggest replacing the income tax with a levy on the rental value of land and natural opportunities. Whatever else one might think of that idea, you have to admit that the compliance cost of it is far, far lower.
After all, land values are already assessed locally; that cost isn't included in the $194 billion price quoted above. Sure, it would cost a bit more to assess rentals for resources like timber lands, geosynchronous orbits, broadcast frequencies and the use of air and water as dumping grounds. But the environmental benefits would be well worth the price, and anyway, with the kind of money we're talking about here, we could easily afford it, along with all the Chinese imports we could want; we could have our moo shu and eat it too.
The origin of the word "economics" has to do with the management of a household, and if we expand -- as we ought -- our sense of the word household to include our entire planet, we will see that a few nips and tucks can lead to some really surprising benefits. I'll just give you one example for now, but I'm sure you can think of many more. UNESCO estimates that about four million people die every year from water-borne diseases such as cholera and dysentery. The cost of providing safe drinking water to each of the 1.75 billion people in the world today who need it is estimated at about ten billion dollars. And yes, that sounds like a lot -- until we realize that it amounts to about one per cent of annual military expenditures, which come to -- wait for it -- seven hundred and eighty billion dollars. That's $780,000,000,000.00.
As much as I dislike this annual accounting, as cranky as it makes me -- I guess I have to admit that it's a useful exercise. I mean, ten billion dollars seems like a lot, but we're talking four million painful, preventable deaths here. A useless fighter plane here, a tax loophole there, and pretty soon you're talking real money.
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Lindy Davies is the Program Director of the Henry George Institute.
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