Understanding the Economic Downturn

Douglas Wilson adds his common sense perspective to understanding the economy. A snippet:

Think of it this way. Suppose you and a buddy bet on the big game, and he bets you a zillion badillion dollars that his team is going to win. You take him up on it, but they lose. He promises to pay you next Tuesday, and you rush home all excited, eager to tell your wife about your good fortune. On the way home, because God has answered all your prayers, you go on a shopping spree involving SUVs, boats, motor homes, flat screen televisions, and so forth. When it turns out your friend doesn’t really have that kind of money — and if he did, he wouldn’t be giving you any — the global economy has not really lost a zillion badillion dollars. There will be some hard adjustments for you to the tune of whatever you bought and can’t take back, but the figure that dazzled you was not real wealth.

Most of the “losses” never existed to begin with, and real wealth hasn’t been lost at all; some has just found new homes.

One Reply to “Understanding the Economic Downturn”

  1. found your comment.thanks!..the eco madness is one more victory for the Master of Disaster himself..and the libs still support him. sigh.

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