Friday, October 30, 2009

Jumping For Joy

Hey! The economy grew at a blistering 3.5% last quarter. Pop the corks kids 'cuz were in high cotton. What ... are you just sitting there? Get up offyerbutt and go out and spend your windfall.

But, before you do, let's try a little thought experiment.

Suppose you had two thousand dollars in the bank. "Yay," you say, "I've got two large to cover my expenses until next payday."

Now suppose some scoundrel broke in and swiped a thousand of your dollars. "Boo-hoo-hoo," you say, "half my savings have just disappeared."

Further suppose your spouse went out and charged a hundred dollars worth of clothes on the old MasterCard, went directly to the pawn shop, resold them for fifty, and deposited that money in the bank giving you now a thousand and fifty smackers.

Would you...

A. Dance about yelling, "Woot, woot, my personal economy grew at a rate of five percent, I'll make up for that stolen dough in no time!"


B. Be very sad because, not only are you out a thousand dollars, you are also an additional hundred dollars (at 20% interest) in the hole and don't even have any new clothes to wear to bankruptcy court.

I do not know which terrifies me more, the thought that our overlords think we are stupid enough to believe a single quarter of borrowed-money-fueled GDP increase is good news, or that they might believe it themselves.