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The “Round Numbers” Theory of Legislating

Tim Fernholz notesthat hot on the heels of centrists slicing Obama’s stimulus plan by a suspiciously round $100 billion, it’s pretty distressing to learn that centrists are now looking “to cut roughly $100 billion from the cost of health-care reform proposals.” Unlike in the stimulus case it’s not that a cheaper health care bill is necessarily a worse one, but the process is backwards:

Instead of starting with what good policy will be, though, we’re starting with “lop $100 billion off whatever the President thinks is a good idea and we’ll go from there,” even if that has the potential to produce a health care plan that doesn’t work very well.

It’s worth saying that the key issue when it comes to government spending should be not cost but value. A dollar spent on improving the health of the population, or producing a more educated citizenry, or less crime-ridden streets is a dollar that’s very well spent. People tend to be skeptical about government spending, however, for the non-crazy reason that they’re often skeptical that money will be spent on effective programs or in effective ways. But when you try to hold down headline price numbers in arbitrary ways and for arbitrary reasons you’re not doing anything to ensure quality-control and thus address any real problems with “big spending” liberalism.

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