Hey, Friend, Spare A Billion?

For the US, one troubling aspect of the $787 billion spending bill is that it sets a very high bar. Any number below that suddenly becomes peanuts.

Hot on the heels of Congress passing a 1000+ page bill without even reading it comes this news:

Mr. Obama plans to unveil his housing plan during a visit to Phoenix. As part of his swing through western states, he is set to stop in Denver Tuesday, when he will sign the $787 billion economic-stimulus plan just passed by Congress.

Mr. Axelrod provided few details of the housing plan, but said a government investment of $50 billion to $100 billion to fund foreclosure prevention "is obviously a necessary part." He promised that the plan would contain "a lot of aspects."

You know money has become confetti when people can demand $787 billion one week, then say they'll need $50 to $100 billion the week after, all while keeping a straight face.

Let's use Berry's Common Sense Economics for a second. Say a friend comes up and says, "Hey, can you lend me some money?" And you ask, "Sure, what do you need?" And he says, "$50 to $100."

At that moment, you might reach for your wallet. Then again, you might say, "Well, which is it? Fifty or a hundred?" If he says he isn't sure, you might just hand him the hundred and call it quits.

Now let's say he says this instead: "Hey, man. Can you lend me $500 or $1000?"

Whoa. Now you must be thinking that an answer to "Which is it?" is pretty important. When he says he isn't sure, you hem and haw, and finally give him $750 to split the difference. You're not happy about it, but he's your buddy, so what the hell.

But what if he'd said, "Hey, man. Can you lend me $5000 to $10,000?" Suddenly the difference between those two numbers is very important. When you ask him what it's for and he says a new car, you might say something like, "Well, it's a lot of money, dude. I'll give you five and you'll have to make it work out with a used Honda."

Now let's say your friend had said, "Hey, man. Can you lend me $50,000 to $100,000?"

The first thing you'd say is no, and ask him if he's been using crack. But let's say you want to find out what it's for and he says, "I need to buy a house." Even if you were rich, I'm willing to bet you'd say, "Well, buy the cheaper house. I'll give you fifty, but no way am I giving you the hundred. I want a contract, with a deadline. I'm going to have to put interest on it and, if you can't pay it back, I'm going to take your car and maybe your kids, too." If you aren't rich, you'd simply tell your friend to take a hike.

Now let's say your government asks, "Listen, I need $50 billion to $100 billion."

And you say...what?

As far as I can tell, nobody in the US would say anything. Last week's "stimulus" mess proved that the government can ask for whatever it wants, and nobody's going to do squat. Hell, the government's not even asking: they're taking. And nobody's marching on Washington to say, "What a second. I wouldn't give my best friend a thousand bucks without asking when I'll get it back. And you want how much?"

Though I'm just a regular dummy, I crunched a few numbers for the heck of it: using 2005 numbers, roughly 134 million people filed returns in the US. Of those, roughly 100 million paid taxes. Now let's take the $50 to $100 billion. We'll throw out the fifty because it's the government, and there's no way they'll go lowball. So:

$100 billion (which is a thousand million for each billion, in case you forgot) divided by 100 million taxpayers = $1000. Poof.

And the $787 billion from the Obama spending bill, divided by 100 million = $7870. Poof.

Then there's the $700 billion bailout plan from last year, divided by 100 million, which equals another $7000. Poof.

These figures are wonky because high earners pay way more in taxes than low earners, but that doesn't diminish the total costs. If we pretend that every taxpayer is "all in this together" to spend their way out of the economic doldrums, then their government has so far spent $14,870 for each of them in the past five months. If Axelrod is right, they will be charged another $1000 on Wednesday when Obama unveils his housing plan. Seeing as Mr. Obama has said that this is merely the beginning, that figure is sure to grow.

It's funny that no one finds this as creepy as having a friend show up asking to pick your pocket. It really is a study in psychology: a friend asks for a thousand bucks and you don't trust him anymore; a stranger blows 15 grand of your cash without asking and you don't say a word.

Perhaps a return to the Middle Ages is in order, where a tax collector can show up at the door and say, "I need $1000." And when you ask what it's for, he says, "Well, among other important things, the National Endowment for the Arts is receiving $50 million to help the economy recover."

"But I don't like independent movies," you say.
"Well, they do sculptures and stuff, too. Great paintings for the kids. Very important."
"No, thanks."
"It's not a request."
"But I don't want to pay for sculptures. Who decided this, anyway?"
"Your representatives. Your friends. You picked them."
"Who?"
"The guy in the big house, and the bunch of people in the other big house."
"Maybe, but I didn't know--"
"You're under arrest."

Maybe it will start to sink in. Eventually.