Saturday, September 24, 2011

Freshman Economics Part II

Had another one of those teenager carpooling moments yesterday... Not only do my son's buddies now hop in expecting an econ lesson, they're beginning to come with their own topics... Yesterday Robbie starts with "what's going on with the market?" After my pithy response (I find kids get almost any concept as long as I throw in a few "dudes", "those dudes" and make references to their weekly allowance) he asks if I heard about some conference in Washington where the government paid $16 each for the muffins and $6 for every cup of coffee...

I said "here's the problem Robbie, there are four ways you spend money", my boy Ryan chimes in here and says "Dad Dad, let me say the last one" (I guess he's heard this a time or two)...

"#1 You spend your own money on yourself: You'll be careful how much you spend and you'll make sure you get your money's worth...

#2 You spend your own money on someone else: You'll be careful how much you spend but you won't be quite so concerned with quality...

#3 You spend someone else's money on yourself: You won't be as careful how much you spend, but you'll make sure you get their money's worth..."

Ryan says:
"#4 is when you spend someone else's money on someone else: You spend all you want and you don't care what you get..."

I close: "That, Robbie, is how they end up spending $16 for a muffin." (although this one might be a #3, depending on who ordered the muffins)...

That, ladies and gentlemen, is how we end up $16 trillion in debt...



note; credit for "the four ways we spend money" goes to the late Milton Friedman...

2 comments:

  1. That's why taxes to the government should be held at a minimum; the problem is: how could that be accomplished when the government is the deciding factor? If I refuse to pay for the $16:- muffins I will land in jail...

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  2. All we can do is keep making noise Vickie... Sooner or later they'll have to start listening...

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