Wednesday, March 18, 2009

Stimulus Anger

Given the current economic situation, it stands to reason that people would be looking for someone to blame. Just look at the sheer rage directed at Bernie Madoff. Personally, I think blaming the Bush presidency is always good. Of course blame is never that simple. These days, the popular things seems to be blaming the large companies that whose ridiculously risky behavior seems to have caused so much of the trouble. Every time you turn around, there's another story about how the head of some company spent this much bail-out money on this stupid thing.

My question is, knowing how much scrutiny is on them right now, why do these businesses keep making the same stupid choices? Are they really that out of touch? Do they really think no one will notice if they pay for a new corporate jet/waste basket/bonus using government money? There are two sides to every story, so I'm hoping there is some good reason for these choices to which we are not privy. Otherwise, the level of stupidity and entitlement is shocking to say the least.


Raymond said...

It's because the people spending the money don't know that "it's government money." They're just spending their budget.

You are the XYZ department, your budget is $50 million/year. You have expenditures that add up to $50 million/year. No problem, right?

And then somebody says, "Hey, what about line item 51,231? You can't spend government money on that!" And you're like, "I've got 200,000 line items each year. My total is within my budget. Why are you getting on my case for staying within my budget? And how do you know that that money is 'government money' anyway?"

And besides, money is interchangeable. (That's sort of why it's money and not "barter".) How do you know that the money you spent is "government money" as opposed to "our own money"?

Bobby wants to buy candy and pencils. The candy costs 50 cents and the pencils cost 50 cents, but Bobby has only 75 cents. Bobby goes to Mommy, "Can I have 25 cents?" Mommy says, "Okay, but only if you're going use it to buy pencils."

Bobby now spends 50 cents on candy and 50 cents on pencils. What did he spend Mommy's money on?

You might say, "Well, Bobby spent 50 cents of his own money on candy, and 25 cents of his own money on pencils, and then spent 25 cents of Mommy's money on pencils."

Or you might say, "Bobby spent 25 cents of his own money + 25 cents of Mommy's money on candy, and 50 cents of his own money on pencils."

There's no difference, because money doesn't "know" where it came from.

Another way of looking at it is that Bobby's original plan might have been to spent 25 cents on candy and 50 cents on pencils. Mommy's pencil money allowed him to spend 25 more cents on candy. Did Mommy's money "go towards candy"?

Joy to the World said...

Yes, yes, I understand all that basic math. The problem is that when you are taking foodstamps, you should not be spending what little money this frees up on caviar! Or at least if you do, don't be surprised when everyone in line at the market glares at you, and then goes off to call their senator and demand an end to foodstamps.

Raymond said...

It's not like they said, "Hey, what are we going to spend this extra money on? I know, how about caviar?"

The caviar order was placed months ago, and besides, the food budget hasn't changed. "If they wanted us to cut back on food spending, they would have cut our budget, right?" And you probably forgot about the caviar order anyway since it's just one of the tens of thousands of orders you process every year.

I'm just explaining how embarrassing caviar orders can slip through. The defiance over it is another matter.