Economic Impacts of Motor Vehicle Crashes

One, of the many, costs of motor vehicle use is damages due to crashes. Many of these costs are socialized — that is to say they are not paid for directly by those doing the damage. And since everything ultimately is paid for, the costs are borne by everybody whether they drive responsibly or not, or even whether or not they drive.

“The cost of motor vehicle crashes that occurred in 2000 totaled “$230.6 billion. This is equal to approximately $820 for every person living in the United States and 2.3 percent of the U.S. Gross Domestic Product”.

Economic Impacts of Motor Vehicle Crashes 2000. NHTSA (google for full pdf, here is summary)

How can this situation be improved? After all, everybody “has to” drive, don’t they? Well not quite. By bringing costs more in line with usage, users will make more sound economic choices. Here are two ideas: The Disneyland Model addresses shortcomings in the motor vehicle insurance scheme. Another place to look is Social Security Disability (this also trickles down to Medicare/Medicaid because disabled persons become eligible regardless of age). The federal disability system, mandatory for ALL wage earners, is a de facto extension of auto insurance. Virtually everybody who is seriously injured ends up in some way on this. The problem is it is funded from payroll taxes — and totally decoupled from the activity that is causing the problem.

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