10 ways that doing the right thing would save us money
In a new report, the Institute for Policy Studies and the Poor People’s Campaign reveal some of these underreported savings as part of a detailed analysis of the costs and benefits of transitioning to a moral economy.
We identified 10 ambitious changes we charted that would offer huge returns on investment above the status quo.
1. Comprehensive immigration reform
If we accepted more immigrants and created a pathway for more undocumented people to gain legal status, the benefits would outweigh the costs by nearly $200 billion over 10 years, according to a Congressional Budget Office analysis. Why? Because once they’re allowed to come out of the shadows, immigrant workers would pay increased income and payroll taxes — above the billions they already pay.
2. Elimination of child poverty
In the richest country in the world, millions of children live in poverty because we skimp on assistance programs. The Children’s Defense Fund has estimated that the long-term costs of lost productivity, worsened health, and increased crime rates that stem from this under-investment total roughly $700 million per year. Strengthening our safety net would reduce these costs in both lost dollars and human potential.
3. Universal single-payer health care
A publicly funded, single-payer system would save money by eliminating bloat, including health industry executives’ fat paychecks and inflated pharmaceutical prices. One analysis estimates the savings at 9% of the cost of our current system, the world’s most expensive, which would save businesses and individuals as much as $310 billion per year while expanding coverage to all.
4. Free higher education
People who have the opportunity to extend their education past high school tend to earn higher salaries. This means they pay more in income taxes and rely less on public assistance. A California study found that for every $1 invested in public colleges and universities, the state gained $4.50.
5. Pentagon spending cuts
Ending our wars and shifting from militarism toward peace and diplomacy would make our world safer and free up funds for real security at home. We could cut $350 billion per year from spending on wars, our 800 overseas military bases, and lucrative contracts for weapons makers — and the Pentagon would still have more money than the combined military budgets of China, Russia, and Iran.
6. An end to mass incarceration
Currently we spend $179 billion per year on policing, courts, and private prison operators. We could slash those costs by abandoning the failed war on drugs. In 2017, police made 1.4 million drug possession arrests, about 600,000 of which were for marijuana possession. Imagine freeing up those resources for real public health programs.
7. Voting rights
Protecting basic democratic rights would be a boon for taxpayers. Just one state, Florida, has paid $385 million in estimated annual costs related to administrative and court expenses and increased recidivism resulting from restrictive voting and civil rights laws for the formerly incarcerated.
8. Safe drinking water
The Flint, Mich., debacle is just the most notorious example of how shortchanging investments in water infrastructure can have disastrous health and economic effects. In that city, the infamous “penny wise, pound foolish” decision to shift the city’s drinking water source created a lead poisoning crisis costing the city, state, and federal governments hundreds of millions of dollars, including an estimated $400 million from the long-term social consequences of lead poisoning. Rebuilding safe water infrastructure in cities like Flint would forestall these enormous economic and human costs.
9. Job creation and living wages
A major new infrastructure investment of $200 billion could create as many as 2.5 million jobs. And raising the paltry federal minimum wage — still just $7.25 an hour — to a living wage like $15 would save money by boosting tax revenue and reducing public assistance needs.
10. Climate justice
Investing in a clean-energy transition would create jobs while addressing the needs of the poor and people of color who are already suffering the worst effects of climate change. Conversely, total inaction on climate change could cost up to 15.7% of GDP per year due to increased disaster relief spending, agricultural losses, public health problems, and other related costs. That’s the equivalent of the cost of the Great Recession of 2008-2009 — multiplied fivefold. Compared to that, investments to prevent and adapt to climate change pay for themselves.
If we stop handing out tax cuts for the rich, welfare for big corporations, and lucrative weapons contracts and instead prioritize the needs of the poor and the planet, we will create more jobs, strengthen our infrastructure, and create short- and long-term benefits that will boost our economy and protect our resources for future generations.
Doing good, it turns out, is also a good bargain.
Sarah Anderson directs the Global Economy Project and edits Inequality.org at the Institute for Policy Studies. She contributed to the joint report, “Poor People’s Moral Budget: Everybody Has The Right To Live.”