guns and the social economics of mandatory liability insurance and taxation [View all]
Last edited Thu Dec 27, 2012, 03:33 AM - Edit history (1)
I find the intersection of economics and other disciplines fascinating, like endocrinology and neuro-economics. In this instance, the author proposes a means by which the invisible hand of the markets might help contribute to the reduction of gun violence.
I think the idea of mandatory requirements for liability insurance for firearms, the way we require it for automobiles, is an excellent solution to a range of problems, including losses from injury and from property damage.
This particular author includes an aspect of taxation in conjunction with liability insurance while referencing social economics sources which make it of particular interest in how financial policy affects our lives.
Apart from the emotional costs of lost lives and the pain of injury, there are very real financial costs to our gun culture in the U.S. that have an impact on our economy. The CDC noted here that there is a real economic cost to suicide:
Injury from self-directed violence, which includes suicidal behavior and its consequences, is a leading cause of death and disability. In 2007, suicide was the 11th leading cause of death in the United States and the cause of 34,598 deaths (1). In 2000, the estimated cost of self-directed violence (fatal and nonfatal) was $33 billion ($32 billion in productivity losses and $1 billion in medical costs) (2). Suicide rates are influenced by biological, psychological, social, moral, political, and economic factors (3). Self-directed violence in the United States affects all racial/ethnic groups but often is misperceived to be a problem solely affecting non-Hispanic white males (4).
Bloomberg Businessweek noted a week ago that gun violence costs the U.S. 174 Billion:
The impact of gun deaths and injuries go well beyond heartbreak to include billions of dollars of losses to the economy. The cost of U.S. gun violence in work lost, medical care, insurance, criminal-justice expenses and pain and suffering amounted to as much as $174 billion in 2010, according to data compiled by the Pacific Institute for Research and Evaluation in Calverton, Maryland.
The nonprofit organization provides cost estimates of illnesses and injuries for the U.S. Centers for Disease Control and Prevention, the U.S. Transportation Department and industry associations, said economist Ted Miller, the group’s principal research scientist.
This is not in any way to diminish the other aspects of gun violence - I also posted this to the gun group btw. But it also belongs here for discussion because it is about using economics to solve not only an economic problem but to also understand the potential for the application of practical economic policy and economic pressures on a social problem that is also an economic problem. It is about, imho, practical economics in a very important kind of usage. So while some of you might at first blush think this post is in the wrong group, please withhold your judgment for a moment, and read the whole thing. It is about guns, yes, but it is about economics and it is about taxation, and a proposal to use how those applications work in the real world to solve a problem which is, at least in part, economic in nature. I hope you will read both the Businessweek article and the Forbes article, and that it might prompt some discussion.
From Forbes:
Newtown's New Reality: Using Liability Insurance to Reduce Gun Deaths
...What we can do is to look at gun sales through the lens of social economics. Market-based risk pricing is the partial answer. Let’s agree that guns as weapons are inherently dangerous to society and owners should bear the risk and true social costs. Translation: Require both owners and sellers to purchase liability insurance that is universally underwritten by actuaries according to relative risk.
Given that gun violence, which kills more than 30,000 Americans annually, is harmful not only to our well being, but our economy, we should use economic disincentives to regulate its use.
read more here: http://www.forbes.com/sites/johnwasik/2012/12/17/newtowns-new-reality-using-liability-insurance-to-reduce-gun-deaths/
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