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CRIME
The Economic Cost of Crime.The Club for Growth believes the most basic function of government is the protection of its citizens. We also understand the cost of crime goes well beyond the tragic human toll; it’s a significant detriment to economic growth.
Crime constrains growth in two ways. By imposing direct and indirect costs on firms it reduces profits, deters investment and increases business failures. And, the perception of high levels of uncontrolled violent crime restricts work and leisure activities, restrains investment and reduces tourism.
The cost of crime both to our communities and our overall economic system is simply staggering. In testimony before the U.S. Senate,Georgetown University Professor of Public Policy Jens Ludwig clearly laid out* the costs of crime to the U.S. economy:
• The costs of crime to America are plausibly on the order of $2 trillion per year. By
way of comparison, total Gross Domestic Product (GDP) in the United States in
2004 was equal to $11.7 trillion. Put differently, the “crime tax” on Americans –
that is, the reduction in quality of life due to crime – is the equivalent of around 17%
of GDP.
• Included in the overall cost of crime is around $200 billion in government expenditures
on the criminal justice system and another $167 billion in costly private measures to
protect people and businesses against crime. Non-pecuniary costs also figure
prominently in the burden of crime to American society.
• While “street crime,” particularly violent crimes, is disproportionately concentrated
among our nation’s poorest residents, the costs of crime are much more evenly
distributed than victimization statistics would suggest. Available research indicates
that crime imposes large costs on middle-class families through increased taxes,
private measures to reduce the risk of victimization, and the fear and anxiety
associated with the risk of victimization to one’s self and loved ones.
Wisconsin Club for Growth believes that lawmakers, judges and law enforcement should enact and follow policies that keep violent criminals in prison. As important, our judiciary shouldn't be used to create new rights for criminals. Not only is this essential for our personal safety, it’s critical to a vibrant Wisconsin economy.
* Georgetown Professor Jen Ludwig testimony to the U.S. Senate 9/19/06
