Why Government Doesn’t Work, No Matter Who Runs It
In 1980, Nobel prize-winning economist Milton Friedman and his equally brilliant economist wife Rose produced a 10-part PBS series and an accompanying book about the benefits of economic liberty called Free to Choose. (Both the series and the book have been recommended in this magazine before and cannot be recommended often enough.) Among the many displays of genius in Free to Choose was a simple box graph proving that, mathematically, there are only four ways that money can be spent.
There are only two kinds of money: The money that belongs to you and the money that belongs to other people. There are only two ways to spend money: on yourself or on others. And 2 X 2 = 4.
Let’s take cars as an example of something to spend on, and me as an example of someone doing the spending.
Way No. 1
Your money spent on yourself.
I purchased a Porsche 911 29 years ago that I still own. It was a great deal. I got it almost new from an orthodontist who scared himself and bought a Lexus coupe.
When you spend your money on yourself you get – as nearly as you can – exactly what you want, and you bargain as hard as you can for it.
Way No. 2
Your money spent on other people.
You still bargain hard… But you’re not quite as concerned about getting exactly what’s wanted. Although I’m sure my wife is very fond of the Geo Tracker I got for her and the kids.
Way No. 3
Spending other people’s money on yourself.
I’m on the fence between a 730-horsepower V-12 Lamborghini Aventador that goes for $421,145 and an Aston Martin DB11 coupe, a steal at $201,495.
Way No. 4
Spending other people’s money on other people.
Who cares?! You’re not involved at all. It’s not your dime, and nothing’s in it for you. So it might as well be billions spent on crapola, or, as it was called during the Obama administration, “Cash for Clunkers.”
No. 4 is the way all government spending is done.
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