Imagine there are two societies like this. One invests in building huts and storing food, the other one doesn't. They don't have to maintain the food storage and huts. The labor is spent on something else that advances society. Let's say this gives them a 1% advantage in advancing society every year. After 100 years the 1% advantage turns into 1.001^100 = 2.7. The society that didn't invest in the disaster plan advanced much more.
When you tie up your resources you can't invest it into something else. Governments know this very well. That's why they borrow money to invest it into projects that will have a higher payoff than the interest.
At some point in disaster planning you need to ask what the impact of the preparation is vs the impact of the disaster itself. Obviously officials can't say after a disaster that the reason they didn't prepare was that they calculated that the cost to prepare was higher than the likelihood of the disaster times the cost of the disaster. If the officials admitted that then they would seem heartless. They say instead: "There was no way to see it coming."
If you think this line of thinking by officials is unreasonable, then I'd like to ask you: do you have a bomb shelter at home? Why not? The Swiss do: [0]
>"Every inhabitant must have a protected place that can be reached quickly from his place of residence".
>"Apartment block owners are required to construct and fit out shelters in all new dwellings".
>(Articles 45 and 46 of the Swiss Federal Law on Civil Protection).
Obviously this is an expensive law. The Swiss can afford it, because they're one if the richest countries in the world. In the case of disaster the Swiss are prepared. The rest of us are not.
Say Pandemic response preparation costs $10 billion a year, and the event occurs every hundred years. That means the total cost is $1T over 100 years.
Has the Pandemic caused more than $1T of damage to the United States? We've spent more than $1T just on the government bailout, which doesn't even come close to covering the damage to individuals and the economy as a whole. I'd say it easily exceeds $1T. Far more was spent on the Iraq war than on Covid preparation, yet the latter would have paid massive returns.
Frankly, pandemic response would be a rounding error compared to the defense budget. Even $2B a year in pandemic preparation might have saved us. That's only $200B per hundred years, far less than Covid has cost the US this year.
No. The direct cost at $10 billion a year might be $1T over 100 years. The opportunity cost, which is what I was talking about, is not $1T.
If you want to factor in opportunity cost you have to think of it like compound interest. $10 billion invested today could have a $1T payoff on its own over 100 years.
Inflation alone would make $10 billion in 1920 worth $128 billion today. And inflation doesn't account for any efficiency increases you can gain over time if you had invested the money otherwise.
When you tie up your resources you can't invest it into something else. Governments know this very well. That's why they borrow money to invest it into projects that will have a higher payoff than the interest.
At some point in disaster planning you need to ask what the impact of the preparation is vs the impact of the disaster itself. Obviously officials can't say after a disaster that the reason they didn't prepare was that they calculated that the cost to prepare was higher than the likelihood of the disaster times the cost of the disaster. If the officials admitted that then they would seem heartless. They say instead: "There was no way to see it coming."
If you think this line of thinking by officials is unreasonable, then I'd like to ask you: do you have a bomb shelter at home? Why not? The Swiss do: [0]
>"Every inhabitant must have a protected place that can be reached quickly from his place of residence".
>"Apartment block owners are required to construct and fit out shelters in all new dwellings".
>(Articles 45 and 46 of the Swiss Federal Law on Civil Protection).
Obviously this is an expensive law. The Swiss can afford it, because they're one if the richest countries in the world. In the case of disaster the Swiss are prepared. The rest of us are not.
[0] https://www.swissinfo.ch/eng/always-be-prepared_how-ready-is...