One of the many consequences of the Great Recession was a drop in funding for local government, which included a further cut in already inadequate budgets for police, prosecutors, and the courts. But overloading the justice system with bad laws and then underfunding enforcement is like saving money by not fixing a leaky roof: it’s a false economy that always ends up costing more.
One of the more obvious ways this happens is with police manpower. Good community policing costs money, but it sharply reduces the crime rate, which means substantially lower costs to victims and substantially fewer people being arrested, convicted, and sent to prison. Yes, that seems like a paradox – intuitively, more police should mean more arrests – but that’s consistently what the historical data shows.
All told, when you crunch the numbers, the money spent on community policing ends up saving governments more than twice that much and society as a whole more than four times as much. Put another way, each dollar cut from a police budget that is already too small adds at least $2 to the court and prison budgets and costs the public at least $4. Local governments do it anyway, because they don’t have the money, and because most of the extra cost for higher crime and higher prison populations will be shifted to the state government and to the general public. Underfunding law-enforcement organizations has also led to widespread legalized theft by police forces, which has an incredibly poisonous impact on social capital; see the article on forfeiture abuse for more details.
Underfunded policing (and the issues it causes) is only part of the problem. Overwhelmed courts create some of the more subtle but nasty secondary effects that have arisen out of the massive increase in criminal prosecution over the last few decades. Rising caseloads have combined with the sharp drop in available funding caused by the Great Recession, and, as a result, many of our local, state, and federal prosecutors and court systems are running on incredibly tight budgets.
The courts are a critical part of society. Individuals and businesses depend on them to adjudicate disputes in a timely way so people can get on with their lives. Divorces, bankruptcies, and civil suits can now take years, and a simple criminal prosecution can take three to five years or more, particularly in large cities. All of this puts people and businesses in limbo. Long delays in settling disputes create extra uncertainty and costs. Overwhelmed and understaffed courts mean more delays, and thus considerable costs to the economy.
Studies have repeatedly shown that, when legislatures (at any level of government) cut court budgets or fail to expand them to keep up with demand on the judicial system, whatever savings there are for the government’s budget are exceeded by the costs that result from the overloaded courts. In 2009, the backlog just in Florida’s civil courts cost the state’s economy an estimated $9.8 billion in GDP, according to the Washington Economics Group. This simple-sounding statistic becomes much more infuriating when one discovers that the entire court system of Florida only costs $1.2 billion a year to run. This kind of underfunding of the courts is happening all over the US. Country-wide, that kind of ripple effect from underfunded and overwhelmed courts is costing us (conservatively) at least $90 billion a year, and it could easily be as much as twice that.
The result of underfunding is not just delay, but also a desperate attempt to keep up with the flood of cases by abusing police and prosecutorial discretion, which inevitably causes many additional disruptions. These aren’t easily quantifiable in economic terms. How much does it cost the economy to accidentally arrest the wrong person? How much does it cost the economy when someone is pushed into pleading guilty for a crime they didn’t commit? And how frequently does that kind of thing happen now, compared to previous decades? Not only are those people and their families devastated, but the real criminal remains free and able to commit more crimes.
Back to the Impact of Justice on the Economy