Steven Landsburg on the Oil Spill

Steven Landsburg makes some interesting points about the recent oil spill here, suggesting that we should actually be more concerned about the bailouts and federal spending, economically speaking.

Quoting from the blog:

Let’s try for a little perspective. The BP oil spill threatens to cause something like $10 billion worth of damage. That’s pretty bad. By contrast, an extra trillion dollars worth of federal spending threatens to cause something like $300 billion worth of deadweight loss (that is, underproduction due to tax avoidance and disincentives to work). That’s 30 times worse. How is it that so much angst about the former seems to be coming from people with a history of shrugging their shoulders at the latter?

So it brings up a good question: why are more people worried about the oil spill as opposed the huge federal spending when the federal spending is 30 times more wasteful?

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About shaunmiller

I am a Ph. D student at Marquette University. The primary purpose of this blog is to get my ideas out there, and then have other people scrutinize, critique, build upon, and systematize beliefs. This blog will sometimes pertain to what I'm learning in my classes, but it will occasionally deal with non-classroom issues that I'm thinking about as well.
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4 Responses to Steven Landsburg on the Oil Spill

  1. Handsome Matt says:

    Because we can see an oil spill, we can’t see waste.

    Beyond a few thousand dollars, we start to use images to understand costs: $20,000 is a car, $100,000 is a house, but when you start talking about billions of dollars: it’s unintelligible.

    A billion dollars has no tangible equivalent, it might as well be gazillion or infinity.

    But oil washing ashore, dead dolphins, dying sea birds; these are all things that can be experienced and understood.

  2. John says:

    I a gee with Mike, to a certain extent. While it is true that the gulf spill has more obvious and immediate effects, they are not any less felt than the bail-out waste. Consider the possible outcomes from failure of the bailouts. If we experience augmented taxation, which we will see January first of 2011, coupled with unemployment that has flat lined at 9.5%+, we might be headed for worse economic conditions which are felt and perceived -I would also add that the suffering brought about by a sluggish and poisonous welfare state due to excessive bailout and privileged spending is more perceived by the public than the gulf spill. You see, the dead dolphins, birds, turtles, or fish are not harming us, they arouse with in us sympathy and empathy which is immediate and strongly placed.

    Bailouts also have certain justifications attached to them; the spill does not. No one is justifying the spill as they do trqnsfer payments

  3. John says:

    I a gee with Mike, to a certain extent. While it is true that the gulf spill has more obvious and immediate effects, they are not any less felt than the bail-out waste. Consider the possible outcomes from failure of the bailouts. If we experience augmented taxation, which we will see January first of 2011, coupled with unemployment that has flat lined at 9.5%+, we might be headed for worse economic conditions which are felt and perceived -I would also add that the suffering brought about by a sluggish and poisonous welfare state due to excessive bailout and privileged spending is more perceived by the public than the gulf spill. You see, the dead dolphins, birds, turtles, or fish are not harming us, they arouse with in us sympathy and empathy which is immediate and strongly placed.

    Bailouts also have certain justifications attached to them; the spill does not. No one is justifying the spill as they do transfer payments or corporate-government take-overs. Many people argue that the bailouts are GOOD for us, and that so and so expert said we had to do it, but the spill cannot be said to be good for anyone…

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