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President Trump’s budget director, Mick Mulvaney, made some waves a few weeks ago when he defended cuts to the community development block grant program because “We can’t spend money on programs just because they sound good.” It can be hard to justify spending on things like Meals on Wheels or children’s after school-programs, because their value is in the other costs they help society avoid. The payoff could be fewer trips to the emergency room over time, or a more literate, skilled workforce decades from now. Economists have a term for it: cost avoidance.
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