Monday, March 19, 2012

Stuff, Money and Human Nature

There is an old joke about a law of physics that says that, "Stuff expands to fill available space." I think there is a corresponding law of economics that says that, "Expenses expand to expend available income." Or in the case of those unprepared and/or unable and/or unwilling to manage money (e.g. lottery winners, suddenly rich athletes or politicians), "expenses" will expand faster than will income. Politicians, I also think, present a special case. They will spend money multiple times, call a reduced rate of spending growth a cut in spending, and use one-time "windfalls" to start programs that will continue for years to come, long past the time when the one-time money is consumed.

No comments:

Post a Comment