Explaining ‘Penny Wise, Pound Foolish’ to Rand Paul

A Senate subcommittee held a hearing this week on funding the existing Older Americans Act, including a $2 billion investment to prevent senior hunger. The panel, led by Sen. Bernie Sanders (I-Vt.), explored how the government can actually save money through these investments.

It’s really not that complicated. By spending money to prevent hunger and malnutrition among the elderly, Americans can save on health care and nursing home costs.

Sen. Rand Paul (R-Ky.), labeled “America’s Dumbest Senator” by some, was flabbergasted. “It’s curious that only in Washington can you spend $2 billion and claim that you’re saving money,” he said. “The idea or notion that spending money in Washington somehow is saving money really flies past most of the taxpayers.”

The video of the exchange is well worth watching. (via Oliver Willis)

I think Sanders and Sen. Al Franken (D-Minn.) made this pretty clear, but I’m nevertheless fascinated by the ways in which the right is completely unfamiliar with notion of “penny wise, pound foolish.”

In the case of the Older Americans Act, the government spends a little money up front, and in the process, doesn’t have to spend more money later on more expensive care. Rand Paul thinks this, on a conceptual level, is ridiculous. I think Rand Paul, on any level, is ridiculous.

Understanding this just requires a little bit of thought. If we cut spending on volcano monitoring and tsunami warnings, we save a little money on maintenance, but pay a lot of money on damage repairs after disaster strikes. If we cut spending on food safety, we save a little money on inspection, but pay a lot of money on health care costs when consumers get sick. If we cut spending for the Securities and Exchange Commission, as Republicans are desperate to do, we save a little money on enforcement, but pay a lot of money to clean up financial catastrophes.

For every dollar the IRS spends on audits, liens, and property seizures, the government brings in more than $10. If we spend less on IRS enforcement, as Republicans demand, it costs us more.

Is this really that confusing?

Rand Paul finds all of this “curious” and concludes that the very idea of money-saving investments is absurd. Thanks again, Kentucky, for sending a conspicuously unintelligent, self-accredited ophthalmologist to the world’s greatest deliberative body.

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