Original URL: https://www.theregister.com/2006/03/16/pleasure_ruining_the_world/
Middle-class peeves cost more money than exists
Statistics confirm our worst fears
Posted in On-Prem, 16th March 2006 10:28 GMT
A simple thing prompted this inquiry: a recent story by Forbes that we happened upon, in which we encountered the startling news that this year's National Collegiate Athletic Association (NCAA) tournament will cost US businesses billions in lost productivity. The figures come courtesy of consulting outfit Challenger, Gray and Christmas - and Forbes, to its credit, expressed skepticism about them.
This led us to wonder just how much money is lost to enjoyable things that finger-wagging middle-class farts disapprove of, such as smoking, drinking, gambling, overeating, watching sports, and the like. The figures we obtained (about which more below), are staggering.
To get a proper handle on this question, we also calculated the social costs of crime, and the monetary losses to businesses from particular crimes such as computer trespass, insurance fraud, shoplifting, and so on. Finally, we factored in unavoidable, mandatory costs such as federal and state government budgets. We wanted to know just how expensive life really is, and just how badly thoughtless, self-indulgent people are stuffing it up.
It turns out that when we allow for unavoidable costs like crime and taxes, the burden to society of our bad habits and voluntary indulgences pushes the cost of living to a sum that actually exceeds the amount of money in existence. And please note: we have not included the costs of health care for diseases and accidental injuries that are not our fault, or the costs of pensions. No wonder the finger-wagging farts are so worried.
First, the methodology. We felt that it was right to use the statistics as supplied, rather than do our own primary research. After all, we're comparing what's claimed to reality, not reality to reality. And the reality just alluded to comes from the US Federal Reserve, which knows more than anyone about how much money there is. That's what they regulate, after all.
According to the fed's very conservative M-1 metric, there was a total of 1.38 trillion dollars in circulation in January of 2006. But we rejected that measure because it consists of little more than cash, traveler's checks, and checking account balances. (We also rejected the M-3 metric, because it includes barely-liquid assets.)
We decided to go with the fairly generous M-2 metric, which includes M-1, plus savings account balances and mutual fund deposits. This gives us a very reasonable money supply of $6.74 trillion for January 2006 -- basically all the money that we Americans, collectively, have on hand at any given moment.
Now for the unavoidable demands on our money supply: first up, we have a federal budget of $2.2 trillion (and yes, some of it is in circulation, and yes, some of the money supply is left over from paying it, while some will yet be needed to accommodate it. This imprecision is a necessary part of dealing with statistics. The trick to doing statistics like a pro is to press on in spite of any doubts you might have).
With state budgets we need to be more cautious. States are partly supported with federal money, so here we want only their combined income from taxes, which we estimate at $557bn.
Next we have the ongoing social cost of crime: that is, what we've got to spend on courts and trials and and cops and prisons and so on. That comes in at $1.7 trillion. But there seems to be some overlap here with items we're cataloging elsewhere, especially in the illegal drugs trade, so we're going to whack off $500bn - quite generously we might add - and calculate it at $1.2 trillion. That figure does not include the cost to businesses of theft and fraud, so we will be adding some (though not all) of those costs later.
So, let's recap the fixed costs of existing: we've got $6.74 trillion to work with, and inevitable expenses of $3.96 trillion. But surely, our remaining $2.78 trillion should take us a long way toward enjoying the good life.
Ah, but we are weak creatures, much given to human frailties, foibles, and vain desires. Our tendency to enjoy tobacco costs us $167bn per year in health costs and lost productivity. And mere second-hand smoke costs $10bn more.
Our penchant for alcoholic drink, a nourishing indulgence without which civilization itself would be impossible, robs us of $185bn in health costs and lost productivity. That alcohol also gave us the most important thinkers in human history should be a bonus, but as no one has bothered to calculate the monetary benefits to society of their various contributions, we remain unable to challenge these data. We've got to accept the loss.
Fast foods, and overeating in general, are a major problem that cost us $13bn in lost productivity, and $102bn in additional health costs. No word on the social windfall from all those McJobs keeping the illiterate busy.
Meat consumption, Puritanical psychotics want us to know, costs $1 trillion in medical expenses. But we're rejecting that outrageous bit of lunacy in favor of some barely-less outrageous lunacy, and are calculating the price at $61.4bn in medical costs.
Gambling is draining us too, but we need not calculate the actual sums wasted at the tables because, as the Grateful Dead observed, "one man gathers what another man spills," and no place better illustrates this postulate than the casino. Vegas losers create hundreds of thousands of decent jobs, and vast profits for casino stakeholders and shareholders. So we'll calculate only the downside of gambling: the bankruptcies, suicides, thefts, and frauds perpetrated by the newly-destitute, which comes in at a cheerful $54bn. A bargain if ever there was one.
Next we come to some dark territory: illegal drugs. Some of them, like reefer and acid, are relatively harmless, but the bulk of them are addictive and deadly: lost wages, broken families, theft, murder - the drugs racket has got it all. The cost to society is $97.7bn, and the cost of the drugs themselves adds another $57.3bn. We know this because the NIH says it's so. Incidentally, we've calculated the cost of the drugs because, unlike the cost of booze, cigarettes, Happy Meals, or wagers lost, drug money goes into a black hole of crime and filth, and rarely provides any useful return.
We wondered if we should add the cost of health benefits paid by employers here, or if we should have stated it at the outset as a fixed, unavoidable cost. We decided to add it here because the costs have become fluid, with American employers re-evaluating their obligations to employees on an hourly basis. We've learned that the tab, for the moment, is a mere $383.2bn.
To this we must add the cost of insurance fraud, which drains $96.8bn from the coffers of the good hands in which we all rest secure.
And lest we forget, there is the $31bn in business costs that retail theft exacts.
Computers have become an indispensable part of our work lives, and we hope that the ludicrous sums spent acquiring and maintaining them (which, by the way, we are not calculating) generate a net profit. We doubt it, but we hope it. Nevertheless, there is a dark side here: cybercrime. It costs businesses $400bn a year, we are told.
We might have included spam in the cybercrime estimate, but just as noise is any sound that you do not welcome and cannot control, so too is spam largely a matter of perception. It's not necessarily illegal. We find that, regardless of one's perception of its legality, dealing with it at work accounts for $17bn in lost productivity.
On top of that, unauthorized web surfing on the job drains our good employers of another $178bn.
We've seen many wild estimates of the cost of illegal immigration (although, surely, letting crops rot in the fields while waiting for US citizens to line up, eager to perform stoop labor for $3.50 an hour with no benefits, seems, at best, a potential disappointment), we found a very modest statistic claiming that the national cost is a mere $10bn, and cite it here.
Now let's wrap up with the NCAA Tournament representing $3.8bn in lost productivity, the Super Bowl, which represents $821.4m in lost productivity, and the World Series, which represents $465m in lost productivity.
We come up with a grand total of $7.39 trillion - well in excess of the $6.70 trillion that actually exists. That's right, when you allow for the basic costs that we've all got to put up with, and the inevitable losses to criminals like Ken Lay and Ted Bundy, and then pile on the items that meddling little turds hate to see us enjoying, it all costs more money than there is.
Unfortunately, our little study is incomplete. We can only wonder what the social costs are from needless worry and stress brought on by the torrent of fraudulent statistics concocted by finger-wagging, middle-class farts.
Now that would be a number worth knowing. ®