Question

If you were the President of the United States and had to choose between spending on improvements in infrastructure (bridges, roads, trains, etc.), providing health care guarantees to families, or enhancing our military strength, which would you choose? Explain why in as much detail as possible.

Answer 1

If I were the President, my priorities would be:

1- Healthcare guarantees

2-Infrastructure

3-Military Spending

The reason for my prioritization is simply the relative effect of each of these in the country's overall progress. The USA is one of the most expensive countries in the world for healthcare expenditure, with a large part of the expenses borne by out-of-pocket expenditure by citizens, which greatly adds to their misery and may push a lot of families into deprivation. A major health crisis in the family, if it does not have access to insurance, might force the family to cut down on other vital expenditure like education etc. It might also deteriorate the health condition due to lack of purchasing power for good healthcare. This will have a detrimental effect on the productivity of individuals. A health care guarantee backed by the federal government will free up resources in the households to spend elsewhere and hence it will lead to more productive investments. Households can spend on starting a new business, sending their kids to better schools etc. Insurance works on the basis of the law of large numbers. If insurance is backed by the federal government, more people will buy it, pushing premiums down and also boosting the savings rate in the economy. This might correct the anomaly that the US has one of the lowest savings rate, around 3%, in the developed world.

Secondly, a well-functioning economy requires good infrastructure like rail, roads etc for quick transportation of workforce and material and also to push down shipping costs by fostering competition. Investments in the development of infrastructure are very heavy and have a big gestation period i.e. it takes a lot of time before such investments start to make profits. So the private sector might not be willing to invest in this crucial area. So the government has to invest. For example, the federal government spent around $ 26 billion in building the interstate highway system in the 1950s.

Lastly, the US already has over 800 military bases outside the mainland US. It already spends over $ 800 billion on the military, much more than any other country. While a large part of this spending is necessary to maintain the balance of power in the world and also peace, this can still be cut down as regions become more stable and prospects of war go down.