Friday, October 28, 2005

At what cost?

I saw on the news yesterday morning that Westchester County wants to offer "free" inspections to determine how energy efficient your home is (principally in retaining heat). These inspections normally cost homeowners about $300. Depending on how much additional insulation, new glass, etc., is needed, homeowners might save money in the very first winter, possibly the second.

The quote from Bastiat's The Law that I used last night also applies tonight. Will people not perform certain rational actions just because there is no law compelling them? Most people are generally aware that improved insulation will help reduce heating bills, but they've made the decision that hiring a professional inspector, then having the work done, is not worth it. For whatever reason, they may prefer to spend a few hundred dollars more each winter, instead of spending many hundreds of dollars in the short term to save in the long term. Or they might instead be radically ignorant (being so unaware that they don't know the information even exists) of the potential savings. In that case, making them aware (bringing them to rational ignorance, where they realize they don't know but choose not to expend resources to know) might even cost more than what would be saved in heating. Informing the county via ads will cost money, and there is the possibility that people will hire inspectors when they didn't need to; both are wasted money and could offset any savings in energy costs.

People are already free to hire the inspectors, but Westchester leaders apparently think we're not hiring them often enough. And if this plan goes through, since people think they're not paying for an inspection, they have every incentive to get one even if they don't really need it. The inspections will be "free" just like the "free" Bee Line bus rides that my county offered this year, to compensate riders after the employee strike. Free, just like the "free" bus shuttle between my alma mater (SUNY Purchase) and White Plains, which is mostly paid for out of a transportation fee. Perhaps "free" like Canada's, as Don Boudreaux put it, "insanely stupid health-care system"?

The money has to come from somewhere. Perhaps it can come from Santa Claus, the Tooth Fairy, or some other benevolent being that Paul Krugman and others apparently think will redeem the U.S. Treasury notes in the Social Security "trust fund."

I am always incredulous at how people think things are "free." Even broadcast radio and TV aren't free. At my work we have "free" beverages, but they do not come without cost. The zero cost also means a higher rate of consumption than otherwise, even if we are conscious of the cost to the company. I myself am partial to Fresca at all hours of the day, and I admit to drinking much more than had I to pay directly.

Regarding another bit of news about county government: in a recent election debate, County Executive Andy Spano claimed, "I reduced or froze county taxes for four out of seven years." That did not rebut what his opponent said, that Westchester property taxes have gone up 40% under Spano's leadership. I don't suppose that had anything to do with tax hikes in the other three years that offset (and then some) any freezes or reductions?

"We have been a very fiscally responsible government," Spano boasted in the same debate. Well, "fiscally responsible" just doesn't have the same meaning it once did. Like most Democrats, he wants to hike taxes to support their profligate spending, instead of the supply-side Reaganomics push to cut taxes (stimulating economic production) and drastically cut spending to balance the budget.

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