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What's the 350° for maintenance spending?
If you were told to bake an item of food without any further instructions, your best guess would be to start at about 350°. If you had to guess the speed limit on a residential street, you'd probably guess 25 miles an hour. If you were told you had to save for retirement all on your own with no further guidance, you'd probably guess to save about 10% of your income.
■ These numbers aren't necessarily universally valid, but they're pretty good starting points -- "Goldilocks zones" for their respective questions. They give a good baseline for figuring out where to start.
■ These Goldilocks values are useful because they are culturally embedded. A person doesn't have to become an expert to know that these values are a good place to start. Culturally embedded values are pretty useful if they help pass along common knowledge or collective wisdom in a way that helps people discern when things look too hot, too cold, or just about right.
■ Economists could do a huge amount of public good if they would come up with a good Goldilocks value for the amount that ought to be reinvested in repairs, maintenance, upkeep and ultimate replacement of expensive capital items. Accountants offer something like this in the form of depreciation schedules, but those numbers tend to be contaminated by adjustments made according to what offers tax advantages, rather than what strictly works in the tangible world. That doesn't give us the value that should be replaced or spent over time in order to keep a useful thing in good functioning order.
■ The deadly collapse at the condominium tower in Surfside, Florida, puts this problem in stark relief. Too many people go without the expectation that ongoing maintenance and upkeep cost real money. Hesitation, resistance, and reluctance are stoked by the lack of a common language for how often and how much we ought to be spending to rebuild, rehabilitate, and maintain the things the make life work.
■ Without a culturally embedded expectation of how much is "just about right", it's hard to know when we're spending too little or when we're spending too much. If we don't have a good baseline, we really can't tell whether we're in the right zone.
■ Perhaps nothing reveals the vacuum of a common cultural understanding of the right value for reinvestment than how we treat infrastructure spending at the national level. There's no reason for a society that is reasonably paying for its own maintenance and repair to have to spend trillions of dollars at a time on infrastructure. That reflects a mindset that says we only "fix on failure". We let the failures grow to the point where the spending seems absolutely unavoidable and then we spend money measured in the trillions of dollars in a single fell swoop.
■ That is neither responsible citizenship nor good custodianship. And it's not economically responsible either. But because we don't have an expectation for what is "just about right", we don't have a sense of when we are under-investing or spending more than we should.
■ It's often lamented that infrastructure projects in the United States appear to cost much more than comparable work in many of our peer countries around the world. Of course, failure has many fathers. But always putting off our spending until a crisis really doesn't offer us the opportunity to spend in responsible ways with a sensible payoff.
■ We don't need a perfect Goldilocks value for all of this -- we just need a decent starting point. Whether you're a state legislator, a city council member, a condominium board member, or just an ordinary taxpayer, you need some sense of how much ought to be the right point to start our budgeting.
■ Without it, we're left scrambling to fix on failure and treat every situation as a crisis. That offers us neither the ability to budget responsibly in advance, nor the mental space to think through whether we're getting the right value for our spending.