Framing the Dialogue

Diminishing Returns

Having a car that is nearly eight years old with almost 150,000 miles makes the annual inspection a likely costly adventure. My appointment was Monday so I dropped the car off Sunday night and anxiously awaited the news. I got the call in the early afternoon and Ed, our mechanic, started going through the list; A/C check, battery, tire rotation…little stuff really. Ed hesitated and I said “okay now for the bad news.” The bad news was repairs to the tune of $1,400 (a big part was brakes all around) and that my car would not be ready until the next evening. The real bad news is that Ed did some checking and told me that my vehicle is showing its age and miles. Some of the hidden stuff will probably need to be replaced next year and maybe I may not want to spend that kind of money. Essentially telling me that I’d be paying a lot more money for an old vehicle…or getting diminishing returns on my investment.

A time is coming when I have to make a decision on whether to put a lot of money in a vehicle that still may not be totally reliable. Do I spend the money on this or take the leap and take on a car payment. Which path gives me the better return? Why spend $3,000 to get another month out of the car? Many of us face similar choices. Do I upgrade the windows in our house to save some energy costs? Should I get one of those fancy on-demand water heaters or go with the tried and true tank heaters? Should I pay $10,000 more for a hybrid car? Should I take paper or plastic at the supermarket?

Those of us with limited funds usually sit down and look at the returns expected between the choices. For instance when we needed a new washer and dryer we went for the high efficiency front loading models. The water where we live is fairly expensive and our savings have been significant enough to make the extra cost of the washer worthwhile. We did not opt for the higher end model with steam cleaning and other bells and whistles due to their diminishing returns. In other words the value of those features were not worth the money to us.

Sometimes I wonder what it would be like to not have to worry so much about the cost of things. You know like our federal government. I heard an example of this recently regarding New York City. NYC has long been the provider of some of the best drinking water in the world. I remember a number of years ago that they actually won a blind taste test against many other waters including popular bottled water. The folks in charge of the water supply have done some pretty creative things to protect their supply, much of which comes from neighboring Pennsylvania. In fact they have spent a great deal of money protecting the watershed where their water comes from. It is easier to keep something clean than to clean it later and by “easier” I mean cheaper.

That is not, however, enough for Obama’s EPA. It seems that NYC had 100 cases of intestinal diarrhea suspected to be caused by bacteria in the water supply. If you are thinking statistics that is 100 cases out of a population of nine million. If you really want to dilute the statistic think about 100 cases over how many billions of gallons of water they treat and supply. As a result of EPA requirements NYC is in the process of completing a $1.6 billion ultraviolet light disinfection system, but even that is not enough. EPA rules require “a concrete cover” over all treated water storage facilities. Try to imagine the size of water storage reservoirs needed to serve nine million people. Try to imagine the cost. One such “cover” is likely to be the largest of its kind in the world…and for what? To save 100 cases of loose bowels? If that doesn’t seem like diminishing returns I don’t know what is.

It is not hard to find examples of government’s ability to ignore the “return” factor that you and I have to consider in our decisions. A ban on Gulf Coast and Alaskan oil drilling may provide some protection for the environment, but the result is higher fuel costs, bringing the fuels from greater distances, and supporting countries who then use that money to attack us. Also consider air quality regulations that will cost billions to comply with yet seem to do little more than avoid nuisances for a vast majority of the population. Consider how the federal government forces banks to give loans to people who cannot pay them back. What is the return for that program…2008 happened with the housing bust and near economic collapse.

I do feel for the folks in NYC and the fact that their water bills have been raised significantly and promises to continue their ascent, however, they do routinely elect Democrats so perhaps they deserve what they get. Local politicians are trying to petition EPA for a waiver. What I frighteningly find happening more frequently is a significant diminishing return on my votes for conservatives and/or Republicans.

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