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Opportunity Cost

Masterhawk

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Opportunity cost is an important concept in economics. For every decision you make, there are tradeoffs. The same is true for economic policy. If the government decides to preserve land from being mined, the economy foregoes whatever resources were in there to begin with. If the mine is built, it may disrupt the ecosystem and/or have adverse effects on the water supply. One important tradeoff is between short term benefit and long term gain. Opportunity cost plays a major role in the conflicts of interest between two policies.

Do we build more wind turbines and solar farms to meet our climate targets or do we allow the coal plants to run a bit longer?
Should a city government increase pensions for public workers, but at the cost of increasing the deficit?
Do we care more about security or privacy?
Should it be harder to buy a gun to reduce murders or do we accept the risk and find a different way?
Should free speech be restricted so that the alt right can't flourish or do we allow it because it's a slippery slope?
Do we institute a series of government policies which history shows isn't sustainable but hey, it'll make the working class happy?
Should the US be involved in worldly affairs because there might be some injustice going on or do we let the world take care of itself because we're just making things worse?
Do we try something new and accept the risk or do we stick with what we know?

Opportunity cost can deadlock political decision because the things which need to be accomplished come at the expense of one another.

For an example, say that you're a city planner and more people are moving into your city, there are three conflicting goals: traffic/neighborhood character, surrounding environment, and adequate housing supply. When lots of people are moving into your city, you cannot meet all three. Meet the first two and cost of living skyrockets due to limited housing supply. Meet the previous two and you get traffic jams (which can be somewhat mitigated by public transportation and congestion pricing) due to higher density living. Meet 1 and 3 and you get suburban sprawl. The only way to meet all three would be to have rent control and affordable housing, both of which further entrenches the local population at the expense of people moving in.
 
Evidence suggests that rent-control programs and affordable housing are mutually exclusive in practice. Rent controls makes housing less available for poor people and more expensive for everyone.
 
Opportunity cost is an important concept in economics. For every decision you make, there are tradeoffs. The same is true for economic policy. If the government decides to preserve land from being mined, the economy foregoes whatever resources were in there to begin with. If the mine is built, it may disrupt the ecosystem and/or have adverse effects on the water supply. One important tradeoff is between short term benefit and long term gain. Opportunity cost plays a major role in the conflicts of interest between two policies.

Do we build more wind turbines and solar farms to meet our climate targets or do we allow the coal plants to run a bit longer?
Should a city government increase pensions for public workers, but at the cost of increasing the deficit?
Do we care more about security or privacy?
Should it be harder to buy a gun to reduce murders or do we accept the risk and find a different way?
Should free speech be restricted so that the alt right can't flourish or do we allow it because it's a slippery slope?
Do we institute a series of government policies which history shows isn't sustainable but hey, it'll make the working class happy?
Should the US be involved in worldly affairs because there might be some injustice going on or do we let the world take care of itself because we're just making things worse?
Do we try something new and accept the risk or do we stick with what we know?

Opportunity cost can deadlock political decision because the things which need to be accomplished come at the expense of one another.

For an example, say that you're a city planner and more people are moving into your city, there are three conflicting goals: traffic/neighborhood character, surrounding environment, and adequate housing supply. When lots of people are moving into your city, you cannot meet all three. Meet the first two and cost of living skyrockets due to limited housing supply. Meet the previous two and you get traffic jams (which can be somewhat mitigated by public transportation and congestion pricing) due to higher density living. Meet 1 and 3 and you get suburban sprawl. The only way to meet all three would be to have rent control and affordable housing, both of which further entrenches the local population at the expense of people moving in.

Proper planning---in which you plan for entirely new neighborhoods with access to major roadways on multiple sides, and planning to link up mass transit to ease congestion. Also, new character can be provided by trying to bring in services, like schools, commercial interests, parks, and community venues. But it all takes planning.

Cities don't tend to plan very well, though, even when the demographics are staring them in the face.
 
Proper planning---in which you plan for entirely new neighborhoods with access to major roadways on multiple sides, and planning to link up mass transit to ease congestion. Also, new character can be provided by trying to bring in services, like schools, commercial interests, parks, and community venues. But it all takes planning.

Cities don't tend to plan very well, though, even when the demographics are staring them in the face.

But then you get suburban sprawl which upsets the environmentalists.
 
But then you get suburban sprawl which upsets the environmentalists.

With planning, you don't get urban sprawl. Urban sprawl results generally from lack of zoning and code restrictions, you let anyone build anywhere with little to no plan from the city or county.
 
Proper planning---in which you plan for entirely new neighborhoods with access to major roadways on multiple sides, and planning to link up mass transit to ease congestion. Also, new character can be provided by trying to bring in services, like schools, commercial interests, parks, and community venues. But it all takes planning.

Cities don't tend to plan very well, though, even when the demographics are staring them in the face.

Being a bit older and watching the "younger generations" I have come to believe there is a failure in parenting. I grew up being told if I wanted something, "work for it, work toward it". We were not well to do and if anything we were on the lower end of middle class. Parents divorced, lived with mother and grandparents, grandfather was a working stiff, a house painter. My dad was a fireman and occasionally I lived with him. I was told to get a good education by studying and applying myself. It took a while but eventually I started to catch on. I was told if I wanted something we couldn't afford then get a job. I had a lot, collecting pop bottles, mowing lawns, shoveling snow. Working as a painters helper in the summer. Then I got old enough to have a real job so I worked in a grocery. I worked at a stable, I'm sure you know what I did there. I still remember my grandfather telling me after I had gotten into a little trouble nothing too serious, but he made it seem so. "I'll always support you, and I'll always help you as long as you are trying to to the right thing. When you do the wrong thing I'll still be there but it will be to make sure you understand there are consequences and penalties." I paid the price a few times.
I watch younger kids and young adults today act as if they are "owed" all the things I have worked my butt off for. A college education, nice home, enough money to take a yearly vacation, if we save enough, a decent automobile but I can't remember how many years it's been since I bought anything but a previously owed car. Nice family and able to provide them with guidance, 3 meals aday, a safe place to sleep and some spending money if they did their assigned chores. Encouraged them to get summer jobs, they played a lot of sports in school. All were execellant students and got scholarship money to pay for most of their colleges expenses. None ever owed a care before college when they all went off and had to have transportation.
Why do people today think it's owed them. There are tremendous opportunities to those who work. College money, part time jobs for spending money, good career opportunities for those that work and apply themselves. Nobody owes you, you owe yourself. Of something like that out of a Rocky movie? But is rings true. I don't mind helping the truly indigent, the sick, the handicapped. But I do mind giving my hard earned money to those too lazy to work for their own.
America is the land of Opportunity and people all people need to be taught to seize opportunity.
 
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