Pursuit of Truthiness

my gut tells me I know economics

Equimarginal Fail

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Consider, for example, that the 2009 budget for homeland security (the folks that protect us from terrorists) will likely be about $50 billion. Don’t get us wrong, we like the fact that people are trying to prevent terrorism, but even at its absolute worst, terrorists killed about 3,000 Americans in a single year. And less than 100 Americans are killed by terrorists in most years. By contrast, the budget for the National Highway Traffic Safety Administration (the folks who protect us on the road) is about $1 billion, even though more than 40,000 people will die this year on the nation’s roads. In terms of dollars spent per fatality, we fund terrorism prevention at about $17,000,000/fatality (i.e., $50 billion/3,000 fatalities) and accident prevention at about $25,000/fatality (i.e., $1 billion/40,000 fatalities).

…. To the extent that we do try to prevent scary things from happening, we should put forth more effort to prevent real dangers like car accidents, heart attacks, and diabetes. Interestingly, many of the real dangers are things that we have a lot of control over (unlike mass murder). Therefore, to the extent that we try to prevent them, we might actually improve our quality of life.

Thats from Psychology Today.

(HT: KPC)

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Written by James Bailey

March 25, 2009 at 4:32 pm

Posted in Economics, fail

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