The late Milton Friedman, 1976 Nobel Prize winner for Economics, on the four ways you can spend money:
1) “You can spend your own money on yourself. When you do that, you really watch out what you’’e doing, and you try to get the most for your money.” (This is the way middle-aged men haggle with Porsche dealers.)
2) “You can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost.” (This is why children get underwear at Christmas.)
3) “I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch!” (The second wives who ride around with the middle-aged men in the Porsches do this kind of spending at Neiman-Marcus.)
4) “I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. And that’s close to 40 percent of our national income.”
This is a classic from the NSC Blog archive, originally posted August 6, 2008.