Skip to content
Search

Latest Stories

Top Stories

Valuing the future

Valuing the future
Getty Images

Kevin Frazier will join the Crump College of Law at St. Thomas University as an Assistant Professor starting this Fall. He currently is a clerk on the Montana Supreme Court.

How much would you pay to save someone’s life? Would you pay any less if you learned that person would die tomorrow rather than today? What if the person wouldn’t die for five days? Five years? Or five decades?


As unpleasant as it may be, the above is a customary exercise every federal agency goes through when reviewing regulations. Pursuant to an executive order from the Clinton administration, agencies must select the regulation that maximizes net benefits. Agencies perform a Benefit-Cost Analysis (BCA) to do just that—they tally up the forecasted benefits and costs over time and see if the latter exceeds the former.

And, though you may want to never think about BCAs again, now’s the time to do so. The Office of Management and Budget is accepting public comment on its regulatory review process, including the ins and outs of BCAs, but that comment window closes tomorrow (June 20), so we must talk about this difficult, complex topic now.

Usually BCA calculations are pretty dry. For instance, a BCA of a five-year tax on marshmallows would likely only include economic variables. The analysts would first calculate the economic benefits and costs for each year and then adjust those yearly estimates to bring them into present value. This adjustment—determining the present value of future benefits and costs—is known as discounting.

Sign up for The Fulcrum newsletter

Discounting reflects the fact that $1 today is worth more than $1 tomorrow. If you had that dollar today, then you could put it in the bank and earn interest, invest in the stock market, and all other sorts of stuff that would leave you with more than a dollar tomorrow. Duh, right? The comparative value of a “today” dollar versus a “tomorrow” dollar depends on a great deal of factors—are the banks providing a high interest rate? Is the stock market crashing or thriving? Do you have urgent needs or would waiting another day be no big deal? All of those factors shape your “discount rate.” The higher the discount rate, the more weight you assign to benefits and costs in the short-term, and vice versa. A discount rate of zero would mean you assign equal weight across time.

But what if the regulation in question isn’t as fluffy as a marshmallow tax? What if you’re regulating the proper level of a known toxin in household paints: at level A, you anticipate that one death will occur in year one and nine will occur in year two; at level B, no deaths will occur in year one and ten will occur in year two.

In both cases, ten people die in the span of two years. So there’s no difference, right? Wrong…at least under a traditional BCA using a positive discount rate. Under any such a rate, the deaths that occur in year two would “cost” less. So, assuming levels A and B achieve the same total benefits, level B would have fewer total costs because all of the deaths occurred in year two. Now imagine a harder case: level A results in 100 million deaths tomorrow, but no deaths beyond that; level B results in no deaths tomorrow, but 101 million deaths in ten years.

Some people would have no problem going with level B – they might justify their decision by claiming that society can use the intervening nine years to come up with a way to save some lives or they might say that our complex, interconnected world requires assigning lives monetary value that can be integrated into a quantitative analysis.

I’ll address the second argument first – it is, to quote my grandma, “full of baloney.” I get that you can invest “today’s dollar” and earn more, but you cannot put a human life in the bank. Future lives should not be treated as investment vehicles.

The first argument is a little tougher – humans have time and again exceeded our own expectations and developed technologies beyond our wildest dreams. In some cases, it seems likely that we can innovate our way out of worst-case scenarios and save future lives. However, in many cases, regulations and their likely effects are very hard to reverse or actually irreversible. In those cases, no amount of innovation will save future Americans. In those cases, agencies should be obligated to use a discount rate of zero and equally value current and future lives.

This critical process informs the most important regulatory actions taken by the federal government. If you’d like to share your own perspective, now is the time. Visit here to find out more.

Read More

Pete Hegseth walking in a congressional hallway

Pete Hegseth, President-elect Donald Trump's nominee to be defense secretary, and his wife, Jennifer, make their way to a meetin with Sen. Ted Budd on Dec. 2.

Tom Williams/CQ-Roll Call, Inc via Getty Images

Hegseth is the wrong leader for women in the military, warn women veterans and lawmakers

Originally published by The 19th.

WASHINGTON, D.C. — As Pete Hegseth tries to persuade senators to support him to lead the Department of Defense in the Trump administration, several lawmakers, women veterans and military advocates warn that his confirmation could be detrimental to women in the military and reverse progress in combating sexual assault in the Armed Forces.

Keep ReadingShow less
disinformation spelled out
TolikoffPhotography/Getty Images

Listening in a time of disinformation

The very fabric of truth is unraveling at an alarming rate; Howard Thurman's wisdom about listening for the sound of the genuine is not just relevant but urgent. In the face of the escalating crisis of disinformation, distortion and the unsettling normalization of immoral and unethical practices, particularly in electoral politics and executive leadership, the need to cultivate the art of discernment and informed listening is more pressing than ever.
Keep ReadingShow less
Donald Trump and Joe Biden in the Oval Office

President-elect Donald Trump and President Joe Biden meet in the Oval Office on Nov. 13.

Jabin Botsford /The Washington Post via Getty Images

Selfish Biden has given us four years of Trump

It’s been a rough go of it for those of us still clinging to antiquated notions that with leadership and power should come things like honesty, integrity, morality, and expertise.

One look at any number of Donald Trump’s Cabinet picks and it’s clear those things no longer matter to a great number of people. (Hell, one look at Trump himself and that’s painfully, comically obvious.)

Keep ReadingShow less
Notre Dame at night

People gather to watch the reopening ceremony of the Notre Dame Cathedral on Dec. 7.

Telmo Pinto/SOPA Images/LightRocket via Getty Images

Cherishing our institutions: Notre Dame’s miraculous reopening

We witnessed a marvel in Paris this weekend.

When a devastating 2019 fire nearly brought Notre Dame Cathedral to the ground, President Emanuel Macron set the ostensibly impossible goal of restoring and reopening the 860-year-old Gothic masterpiece within five years. Restorations on that scale usually take decades. It took almost 200 years to complete the cathedral in the first place, starting in 1163 during the Middle Ages.

Could Macron’s audacious challenge — made while the building was still smoldering — be met?

Keep ReadingShow less