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The discussion about inequality and CEO pay and tends to suffer from the human mind's inability to really understand large sums of money. For most of us, a million dollars is outside our realm of experience. A hundred million dollars is unimaginable. A thousand million dollars -- which is to say, a billion -- is inconceivable. And twenty-thousand million dollars -- $20 billion -- may as well be infinite. So there's a tendency to simply let these sums blend in together, evaluating their usage abstractly rather than in terms of opportunity cost. We even put them into a shorthand that makes them look comparable to smaller numbers: $10 billion does not look that different from $10 million, or $10 thousand. But it is! Which is all to say, I like the way Nick Kristof puts this:
A study released a few weeks ago by the Institute for Policy Studies in Washington found five major elements in the tax code that encourage overpaying executives. These cost taxpayers more than $20 billion a year.That’s enough money to deworm every child in the world, cut maternal mortality around the globe by two-thirds and also provide iodized salt to prevent tens of millions of children from suffering mild retardation or worse. Alternatively, it could pay for health care for most uninsured children in America.And this goes for most anything. The question with, say, $87 billion for more war in Iraq is not whether that money will help us win in Iraq, but whether that's the most productive use of eighty-seven thousand million dollars, all of it contributed by taxpayers. Take the humanitarian rationale, that we can't let Iraq slip into chaos. Would that money, spent to sustain troop deployments, save more lives than using that money to treat malaria, distribute mosquito netting, and purify water? Or take the argument that it's necessary to keep us safe: Would that money be better spent in Iraq than on a $40 billion nonproliferation program? Will it do more for the American economy than the same sum pumped into infrastructure investment or a tax rebate? You could argue that it would, or that we have a unique responsibility to Iraq, or that there are intangibles afoot, or whatever. But that's the sort of thing that people should actually argue about, rather than simply evaluating expenses in a vacuum.
