Do You Count The Cost?

There is a house just a couple of miles up the road from where my wife and I live. It is a house that has sat almost fully built for several years. Here is that house on Google Maps: 87-2182 Farrington Hwy – Google Maps. A closer image: Farrington Hwy – Google Maps.

This home has been in a perpetual state of “almost completed” for probably close to a decade now. I have no idea what the actual story is with this house, but one rumor is that the builder ran into difficulties with zoning laws. If you look at the structure carefully you can see that it appears to be divided into at least four equal units, that might be individual apartments. And the rumor has it that the zoning in that area does not allow for multi-unit dwellings. Regardless of the reason, the house has remained just as it can be seen in the Google Maps image for several years.

And the real kicker about this house is that it is directly across the road from Nanakuli beach. That would be this beach here. The real estate estimate on this property is $1.5 million. That is a fairly large sum of money to simply leave sitting in a partially developed property.

Jesus Christ, while conversing with one of the chief Pharisees on the Sabbath, taught the people saying:

28 For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it? 29 Lest haply, after he hath laid the foundation, and is not able to finish it, all that behold it begin to mock him, 30 Saying, This man began to build, and was not able to finish. Luke 14:28-30.

It is somewhat incredible that Jesus Christ taught this very same truth more than 2000 years ago, and yet we are still falling into the same trap today as a people. The words of Holy Scripture are just as relevant now as they were 2000+ years ago. And this teaching is not just for those of us who own homes or are thinking about buying/building a home. The house/structure is simply the example. The truth in the teaching is to count the cost. In everything we do. We should count the costs in life.

This is also true for governments and nations. We as a people need to count the costs.

Today, President Biden signed into law the Inflation Reduction Act. The claims are that this legislation will result in new spending of $437 billion while raising an expected $737 billion and lowering the US National deficit by some $300 billion. Which is a net gain of some $600 billion ($737 billion raised – $437 billion spent = $300 billion + $300 billion in deficit reduction = $600 billion). Sounds fantastic, right? But have we really and truly counted the cost? Or have we begun to build the house without any hope of ever finishing it?

If we look at just one provision of this legislation, the increase in IRS Agents by some 87,000 in new hires, we begin to gain some insight into just how well our government counted the cost.

The addition of 87,000 new IRS Agents is key to the legislation. After all, if the majority of the $737 billion expected to be raised is going to come from taxes, you will need those Agents to process all that new revenue. But is it even feasible to hire 87,000 new IRS employees within 5 years? Most, if not all, government Agencies are currently struggling to meet their hiring goals for 2022. For most Agencies, to include DoD recruitment, those goals do little to increase the size of the Agency. They are geared toward simply keeping up with natural attrition (retirements, workers who leave for better job offers, etc.). To actually gain 87,000 new employees over five years would mean hiring goals of 17,400 new employees per year. Which is bound to put a strain on a system built to hire some 2,500 – 5,000 new employees per year. Part of the “cost” is what happens to the system as a result of an influx of 87,000 new employees.

But let’s say that somehow the IRS magically manages to hire 87,000 new employees. What will those new employees cost? This is where the math becomes interesting.

Obviously, there is the Direct Cost of their salaries. These new hires are expected to be 4-year degreed individuals with a financial background and who will be expected to go through basic firearms training. This roughly equates to a GS09 on the General Schedule. However, the base schedule is augmented by locality pay and sometimes COLA (Cost Of Living Adjustment). These new hires will probably be scattered across the US, but the IRS has a large presence in both Washington D.C. and Atlanta Georgia. If we assume a GS09 Step 05 with an averaged locality pay we might assume $70,000 (rounded) per employee per year.

But wait, what about Overhead Cost? Overhead Costs are things like healthcare, retirement, vacation, holidays, sick leave, etc. And those are very real costs that are paid with very real dollars by the Agency (in this case the IRS). Those costs are generally computed by businesses at 2/3 of the total salary. Which they calculate at 1.66 * $70,000 (salary) = $116,000 (rounded) per employee per year.

But there is even more. We have to figure in General and Administrative Costs. Things like Human Resource (HR) personnel for all of those new employees, the facilities costs (where is the IRS going to get 87,000 new desks from?) and even parking spaces for the influx of new commuters. They include Information Technology (IT) support (plus all the new equipment for those employees) and even legal support to handle employee complaints and disputes. Most businesses compute these total costs at about double the employee loaded cost (Direct Cost + Overhead Cost). In this case $116,000 * 2 = $232,000 per employee per year.

At this point our Inflation Reduction Act is costing us $232,000 * 87,000 = $20,184,000,000.00 ($20 billion) per year. Which is arguably only about 1/4 of the total $437 billion the legislation aims to spend over 5 years. But consider this, the $737 billion the legislation intends to raise, comes out of the American economy. Which is yours and my pockets. It’s not $737 billion being squandered or hoarded by corporations and the super-rich today. It is money that will affect everyone either directly or indirectly. And that toll + the $100 billion in spending on new hires may just mean that the house never gets built.

There is one other cost I’d like you to consider today. And that is the cost of your eternity. There is a very real Heaven, and there is a very real Hell. And every bit of humanity will spend all of eternity in one or the other. Fortunately for humanity, the cost of Heaven has been paid by the Son of God, Jesus Christ some 2,000 plus years ago on a Cross on Mount Calvary. The only thing for you to do is to Consider That Cost.

One response to “Do You Count The Cost?”

  1. Good points. Since man habitually miscalculates temporary things. I’m glad God took care of eternity.

Feel Free To Share Your Views …

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: